The following are excerpts from Canaccord Genuity analysts' commentaries.
Apple (NASDAQ:AAPL): Apple pie.
Canaccord Genuity Technology Analyst Michael Walkley’s September channel checks indicated very strong sales of the iPhone 5 at AT&T
(NYSE:VZ), and Sprint
(NYSE:S) as well as in international markets. Apple sold a record 5 million iPhone 5 smartphones during the opening weekend of availability, with demand much greater than Apple’s ability to supply. Further, his checks indicated record orders for the iPhone 5 and strong sales of the legacy iPhone 4/4S models at reduced prices with the $0.99 iPhone 4 at AT&T sold out at many stores and up to a week wait for new shipments of this older model.
Given these checks combined with Apple’s plans for an aggressive iPhone 5 launch with 240 carriers in 100 countries by year end, Walkley remains confident in his above consensus December quarter iPhone estimates with sales of 40 million iPhone 5s and 50 million total iPhones. He expects additional countries to launch the iPhone 5 in early January including all three carriers in China ahead of Chinese New Year in February.
With his expectation that the world’s largest carrier, China Mobile, will launch its first iPhone on its network that also supports its TD-SCDMA 3G technology, Walkley anticipates very strong iPhone sales of 47.5 million during the March quarter. Bolstered by the iPhone 5, Walkley remains bullish on shares of Apple and believes the company’s industry-leading software ecosystem and integrated hardware expertise will lead to a strong multi-year product cycle.
Google (NASDAQ:GOOG): iPass.
Google, with a market cap of nearly $250 billion, has surpassed Mr. Softie to become the world’s second-largest technology company, as computing over the Internet reduces demand for software installed on desktop machines. Analysts note the milestone follows Google’s rise from a search-engine invented by two Stanford University students into an advertising powerhouse that makes the world’s most used mobile operating system and tool for digging up information on the Web. It also reflects the ascension of the Internet as the delivery channel for more of the software and computing tasks that were once left to the Microsoft
(NASDAQ:MSFT)-dominated PC industry.
Only Apple, the world’s most valuable company at about $630 billion, tops Google among technology businesses, passing Microsoft in 2010 on rising sales of iPhones and iPads. While Microsoft operates an online business including the Bing search engine, it still gets most of its revenue from the Windows and Office software used primarily on PCs. And sales have slumped as some consumers opt for tablets instead of cheaper laptops running Microsoft’s software. Nokia (NYSE:NOK ): "Two divided by love, Can only be one, And one is a lonely number." – Grass Roots.
Canaccord Genuity Technology Analyst Michael Walkley’s September checks indicated global sales trends remained very weak for Research In Motion
(NASDAQ:RIMM) and Nokia. Looking at Nokia, Walkley’s global checks indicated weaker Lumia sales given very strong iPhone 5 sales, increased Android competition, and the lack of new Lumia smartphones during Q3/12. He attended the September 5 Nokia and Microsoft joint press conference and was impressed with Nokia’s recently launched Windows 8 smartphones including the flagship Lumia 920 and the Lumia 820. However, Walkely believes these smartphones will only be available mid-November and face an extremely competitive smartphone market dominated by the iPhone 5 and numerous LTE Android smartphones.
Further, he was impressed with HTC’s recently announced 8X and 8S Windows 8 smartphones expected to launch at 150+ carriers in 50 countries by year end. With Microsoft featuring HTC smartphones in its upcoming ad campaigns, HTC’s Windows sales could create increased competition for Nokia’s Windows 8 Lumia smartphones. As such, Walkley estimates Nokia will sell 3.8 million Lumia smartphones in the December quarter, significantly below consensus estimates of roughly 7 million units.
Looking at Research In Motion, Walkley views the iPhone 5 launch ahead of BlackBerry 10 devices as a major blow to RIM’s potential recovery in C2013 given that Canaccord Genuity's checks indicate strong demand for the iPhone 5 from consumers and enterprises switching from BlackBerry devices. While RIM reported soft but better than expected Q2F13 results last Thursday, his bearish longer-term thesis is unchanged. Given Walkley’s checks that indicate weak global BlackBerry sales combined with his expectations for intensifying competition from rival product launches including the iPhone 5 and numerous LTE Android and Windows 8 smartphones ahead of RIM’s BB10 launches, he maintains a bearish view on BB10 prospects. Further, his checks indicate increasing competition globally from sub-$200 Android smartphones based on Qualcomm
(NASDAQ:QCOM) and MediaTek turnkey platforms. Walkley believes these affordable Android smartphones will increasingly take share from RIM’s low-end focused BlackBerry 7 smartphone sales in emerging markets.
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Canaccord Financial and its affiliated companies may have a Corporate Finance or other relationship with the companies mentioned and may trade in any of the Designated Investments mentioned herein either for their own account or the accounts of their customers, in good faith and in the normal course of market making. The authors have not received, and will not receive, compensation that is directly based upon or linked to one or more specific Corporate Finance activities, or to coverage herein.