Apple May Ship 10 Million Tablet PCs a Year, Lee Says (Update2)

Dec. 31 (Bloomberg) -- Apple Inc. expects to ship 10 million tablet computers in the device’s first year of release, former Google Inc. executive Lee Kai-fu wrote on his blog, citing a friend familiar with the project whom he didn’t name.

The Apple Tablet will be released by Apple Chief Executive Officer Steve Jobs next month and be sold for less than $1,000, according to the post dated Dec. 28. The device will feature a 10.1-inch multitouch screen with three-dimensional graphics and look like a large iPhone, Lee wrote.

Lee, who was president of Google’s Chinese operations, left the company in September to start Innovation Works, a Beijing- based technology fund with investment from WI Harper Group and Foxconn Technology Group. Foxconn’s flagship Hon Hai Precision Industry Co. business is the world’s largest electronics manufacturer and the supplier of Apple’s iPhone.

“It’s a pretty aggressive number for a class of product that’s not yet established, but if anybody could do it, Apple’s probably the one company that could,” said Rob Enderle, an analyst with Enderle Group in San Jose, California.

Lee said in an e-mail to Bloomberg News that the information didn’t come from Foxconn or Apple.

“I have never discussed Apple’s tablet products with anyone at Foxconn, or anyone at Apple,” Lee said in the e-mail.

Jill Tan, a Hong Kong-based spokeswoman for Apple, didn’t return calls seeking comment.

E-Reader?

A tablet device would provide Apple with a fresh source of revenue and give customers a new way to read digital books and connect to the Internet. That could step up Apple’s competition with Amazon.com Inc.’s Kindle electronic-book reader, and low- cost netbook computers from Acer Inc., Asustek Computer Inc. and Hewlett-Packard Co.

“The guys that have sold the most netbooks have been Acer, Asus and Hewlett-Packard, and it could pull some demand from them,” Enderle said.

Apple, which also makes the Macintosh computer, dropped 91 cents to $210.73 at 4 p.m. New York time on the Nasdaq Stock Market. The shares have more than doubled this year, reaching a record of $211.64 yesterday.

Of 44 analysts tracked by Bloomberg, 38 recommend buying the stock. Two analysts have a sell rating, and four advise holding Apple shares.

Apple, based in Cupertino, California, offers music and software through its iTunes online store -- supplementing sales from its computers, music players and phones. Software downloads for Apple’s devices grew 51 percent in December from November, according to research firm Flurry Inc.

To contact the reporter on this story: Tim Culpan in Taipei at tculpan1@bloomberg.net

To contact the editor responsible for this story: Mark McCord at mmccord2@bloomberg.net