Click to enlarge. Source: Deutsche Bank.
FORTUNE — “The next wave of growth in tablets will be characterized by lower price points and mass adoption,” writes Deutsche Bank’s Chris Whitmore in a note to clients issued Monday, the day before Apple (AAPL) is expected to unveil what he and everyone else on Wall Street is calling the iPad mini.
As the tablet market grows from about 20 million in 2010 to roughly 195 million in 2014, Whitmore believes Apple is aiming squarely at an underserved price point between $250 and $350. (See chart.)
“If Apple is able to price the iPad mini at ~$250, the product will be a barnburner; especially during this holiday season,” he writes.
“Apple is uniquely positioned (brand, ecosystem, developer support, etc) to capitalize on the next wave of tablet adoption and capture the lion’s share of industry profits. We believe the iPad mini will enable Apple to extend it competitive lead as Android remains fragmented, MSFT RT is not compatible with Windows 8 and PC OEMs haven’t put forth an iPad killer.”
Whitmore reiterates his “buy” rating and $850 price point.
