just made an back of the envilope calculation on iAD:
Apple is betting on 1 bln ad impressions per day for iAD guessing now that they receive 1 Cent per ad impression (there are wide ranges for cpm's, working with a guessed 10 USD CPM looks ok given Apples potential to come up with very targeted adds) gives 3.65 bln in iAD revenue Apple receives 40% of it, which gives 1.46 bln USD now Apple wil incur cost for hosting etc.
but at least 1 bln USD in profit might look achievable
iAd Could Be Apple's (AAPL) Next Multi-Billion Dollar Opportunity - Analyst
April 9, 2010 12:56 PM EDT
Apple's (Nasdaq: AAPL) newly announced iAd could be the tech company's next billion dollar opportunity, according to analysts.
Broadpoint.AmTech analyst Brian Marshall said, "we believe the iAd platform could generate an incremental ~$2.5bil in revenue and $1.00+ to AAPL's financial model when the business hits its stride."
The firm's sensitivity analysis showed that iAds can generate incremental revenue/EPS ranges from ~$300mil/$0.13 to ~$4.7bn/$2.15 when fully ramped.
The firm arrives at the $2.5 billion mid-point number by taking total ad impressions of about 365 billion per year, multiplied by a CPM of $17 (or $0.017 per ad) then multiplied by a 40% take for Apple.
The firm kept their Buy rating and $280 price target on Apple despite this new opportunity.