Hello iPad, goodbye netbook

Morgan Stanley sees the tablet reshaping the PC market, raises its Apple target price to $332

As if Steve Jobs wasn't getting enough attention after his iPhone 4 keynote Monday, Morgan Stanley's Katy Huberty issued a note to clients Monday night that's basically a love song to his iPad.

By the time she's done, she's raised her iPad sales estimates to 10 million units in calendar 2010 (from 6 million) and her Apple (AAPL) price target to $332 from $310. In her "bull case" scenario, the stock could climb as high as $440 by May 2011.

What's turned her head? The blistering sales of the iPad and the diminishing growth of the netbooks'. Among her findings:

• The iPad is on track to become the fastest ramping mobile Internet device out of the gate and one of the most popular in history (see Exhibit 2).
• Early iPad usage patterns validate the tablet as a computing device. It's already overtaken the Web browsing share of devices like the iPod touch.
• It's at least partially responsible for a sharp drop in the growth of netbook sales, which decelerated to -13% year-over-year in the month of April, from +45% in the first quarter of 2010. Huberty thinks the netbook phenomenon may have peaked; she expects tablet sales to overtake netbooks by 2012.

Below the fold: more Morgan Stanley charts.

See also:

• How the iPad gobbles up netbook sales
• 30% of netbook shoppers got an iPad

[Follow Philip Elmer-DeWitt on Twitter @philiped]