Laptop

J.P. Morgan: Apple is leaving $63 billion on the table

April 9, 2014: 11:29 AM ET

All it needs to do, says the bank's new Apple analyst, is put a keyboard on the iPad.

 Click to enlarge.

Click to enlarge.

FORTUNE -- There's been a changing of the guard at J.P. Morgan.

Long-time Apple (AAPL) analyst Mark Moskowitz is out. Taking his place is telecom analyst Rod Hall, who brings with him what he believes is a $63-billion idea.

Apple, he wrote in an inaugural note to clients Tuesday, basically owns the market for laptops priced above $1,000. It's got an estimated 68% market share of the North American market, a 49% share in Western Europe and a 36% share globally.

But according to Hall, the sweet spot for laptops, as indicated by red rectangle in the attached chart, sits just below that price point: In the $500-to-$1,000 range, into which nearly 100 million laptops -- 55% of the total market -- shipped in 2013.

Apple could make as much as a $63 billion a year in that market, Hall argues, if it would just put a keyboard on the iPad. He calls it Apple's "iAnywhere" solution.

"While some iPad users are replacing laptops with the device we believe that most use the iPad as a supplemental device to either a laptop or desktop PC. If iAnywhere allowed these users to flexibly use an iPad as both a PC and a Tablet we believe that many would elect to simply own one device. We also believe that many users currently purchasing lower priced laptops from vendors like Dell would choose to switch to Apple."

Hewlett-Packard is the big player in the $500-$1,000 sweet spot, Hall estimates, followed by Lenovo (16%), Dell (14%), ASUS (12%) and Acer (10%).

One hardware manufacturer Hall doesn't mention is Microsoft (MSFT) -- a curious omission considering that Microsoft sells a family of machines -- the Surfaces -- that sounds a lot like the one he's suggesting Apple make. Since they were introduced in the summer of 2013, Microsoft's Surface hybrids have met with mixed success. According to GeekWire, total Surface revenue reached $853 million on June 30, 2013. That's almost as much as the $900 million write-down the company took in July 2013 for unsold Surface RTs.                                                              

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