What to expect from Apple in 2011

With the arrival of the widely-anticipated CDMA iPhone at Verizon (NYSE: VZ - News) and a new version of the iPad expected, next year is set to be another big one for Apple (NASDAQ: AAPL - News).

"I do expect them to upgrade the iPad in the first quarter, I do expect them to upgrade the iPhone [and] obviously there will be a Verizon iPhone," said Michael Yoshikami, chief investment strategist of YCMNET Advisors. "I think that the iPhone momentum is going to continue if you look at the rollout of the product globally."

Read on for what to expect from Apple next year.

Verizon iPhone

The Apple developer who screamed "Verizon!" at a bemused Steve Jobs during the iPhone 4 launch may soon get his wish.
Rumors of a Verizon iPhone have been swirling for well over a year — it's an event that will mark the end of AT&T's (NYSE: T - News) exclusive deal to sell the phone in the U.S.

"Everything in our checks is pointing to a February launch of the iPhone at Verizon," Michael Walkley, an analyst at Canaccord Genuity told TheStreet. "We think it's going to sell very well and take share from Android."

Canaccord and other analyst firms have recently raised Apple estimates on the strength of a Verizon iPhone. Pacific Crest expects to see the Verizon model sometime in the March quarter and recently hiked its second-quarter iPhone estimate from 12 million to 15.2 million units.

Some analysts think it will arrive later: "While I am not convinced that it's going to be early 2011, I do think it will be [launched] by summer," Bill Kreher, senior technology analyst at Edward Jones, told TheStreet. "It would make sense to announce a CDMA iPhone with the iPhone 5."

Kreher pointed to the June 2010 launch of the iPhone 4 and speculated that Apple may keep to a similar launch schedule in 2011, announcing both the new iPhone and a Verizon deal. "If you look at the typical cadence of the Apple announcements, they announce a Mac refresh in January, iPads in April, iPhones in June and iPods in September," he said. "I don't know that they want to upset that."

iPad 2

Associated Press

Hitting shelves in April, the initial iPad has left late-coming rivals like HP (NYSE: HPQ - News) and Dell (NASDAQ: DELL - News) trailing in its wake. Apple sold 1 million iPads within four weeks of the tablet's debut; Samsung's Galaxy tab, which debuted overseas two months ago, just tipped the 1 million-sold mark.
"Next steps with iPad are obvious, and Apple has even alluded to them: enhance the product and drive down the entry price," said Ezra Gottheil, an analyst at Technology Business Research. "I expect a new iPad in the first half of 2011, with a price reduction on the current models."

"I think that Apple will reset the [iPad] bar in April," added Edward Jones analyst Bill Kreher. "We can expect a front-facing camera and a thinner form factor."

Kreher thinks that the front-facing camera will herald a major expansion of the Facetime video chat feature that first appeared on the iPhone 4. "The camera will feed into the explosive growth of Facetime," he explained. "[Apple] is offering this Facetime technology to other vendors, whether tablet or PC, and it will be interesting to see who adopts it."

In addition, analysts familiar with Apple's iPad plans say that the next version will have both GSM and CDMA network compatibility, courtesy of Qualcomm (NASDAQ: QCOM - News) chips.

"We think that Apple will sell just under 14 million iPads in 2010 and just under 27 million in 2011," said Canaccord's Walkley. "And some [component] build rates out there suggest that it could be a higher number."