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Since the iPad's debut a little more than two months ago, shares of Apple (Nasdaq: AAPL) have outperformed the S&P 500 by more than 15 percentage points, making it one of the market's best stocks during an otherwise turbulent time. Can the good times continue? I think so, but it'll depend on the size of the iPad opportunity.

We don't yet know what that is, which means snarling bears are just as likely to be wrong as snorting bulls. So let's focus on what we know:

  • More than 2 million iPads have been sold.
  • The iPad sells for between $499 and $829, before service plans or other add-ons.

Multiplying 2 million by $664 (the average of those pricing extremes) tells us that Apple has already booked at least $1.3 billion in iPad revenue. That's a good number, but we know from Apple's second-quarter conference call that the iPad is partially responsible for a coming decline in gross margin.

We also know that there's bound to be plenty of competition. Now that Apple is making its own chip for mobile devices, Intel (Nasdaq: INTC) is making a play to get its newest Atom chip adopted by netbook makers.

Dell, meanwhile, has teamed with Google (Nasdaq: GOOG) for the new Streak tablet and Hewlett-Packard acquired Palm (Nasdaq: PALM) in part to use webOS as the basis for a new line of tablet PCs.

See the problem here? Apple has to move a lot of iPads to produce iPhone-sized profits, yet forthcoming competition could stunt sales.

Fortunately, the Mac maker already has experience winning in a crowded market. Consider the iPhone. Though still a relative newcomer among smartphones, it's challenging Research In Motion (Nasdaq: RIMM) for the market lead here in North America.

Remember also that the iPad's chief rival, Amazon's (Nasdaq: AMZN) Kindle, is becoming increasingly known as a store rather than a device.

Strategically, this makes sense for the e-tailer: More stores on more e-readers and smartphones should mean more e-book sales. But this also has a cost. Free consumers from the need to buy an expensive device, and chances are they won't.

Finally, entire industries are betting on the iPad. Newspapers and magazines see the device as their one chance to charge for digital content that heretofore has been free. News Corp. (Nasdaq: NWS) CEO Rupert Murdoch has even described the device in messianic terms.

He has good reason to believe in the device's transformative powers. ChangeWave Research recently found that iPad owners are far more likely to use the device to read newspapers and magazines than comparable e-readers.

How big is Apple's iPad opportunity? Judging from its current momentum, competitive position, and industry support, it's massive. But I could be wrong. That's why I want to hear from you.

Tell us what you think about the iPad opportunity by voting in the poll below. You can also leave a comment to explain your rationale.