SAN FRANCISCO (Reuters) - Shares of Apple Inc rallied on Tuesday in anticipation of the company's expected launch of a tablet computer next week.
Apple on Monday formally scheduled a media event for January 27 in San Francisco. Although the company declined to provide any details, the invitation said, "Come see our latest creation."
Apple's tablet has been rumored for months, although the company has never publicly acknowledged its existence. Analysts predict the device will have a roughly 10-inch (25-centimeter) touchscreen and long battery life.
Kaufman Bros. analyst Shaw Wu expects the tablet to be something like a "super" iPod touch, and believes the device has the potential to sell 1 million units per quarter.
"From our understanding, it is not intended to replace a Mac but to be somewhat of a 'super' iPod touch where video, gaming, web browsing, e-books, and the ability to run multiple apps would be enhanced with the much larger screen," Wu wrote in a research note Tuesday.
Wu said he expects the tablet's price point to be closer to $999 than to $600 and said he does not expect the device to ship in volume until June.
Cross research analyst Shannon Cross said the tablet could add $1 per share to Apple's non-GAAP earnings in the first year, and said the device could pose a threat to Amazon.com Inc's Kindle and other electronic readers.
Shares of Amazon fell 21 cents to $126.93 on the Nasdaq.
"We believe Apple has a unique opportunity to extend the eBook and netbook market into a new direction," Cross wrote in a research note.
With a $700 average selling price, Cross said, the Apple tablet could generate $2.8 billion to $3.5 billion of revenue in the first year.
Cupertino, California-based Apple's shares rose 3.8 percent to $213.80 in morning trading on the Nasdaq.
(Reporting by Gabriel Madway; Editing by Steve Orlofsky)