Spare Change for Apple, RIM or Palm Shares?
by John Paczkowski
Posted on August 18, 2009 at 10:30 AM PT
Wise is the investor holding shares in Apple, Research in Motion and/or Palm, because these companies are the triumvirate of tech’s new world order.
This according to RBC Capital Markets analyst Mike Abramsky, who in a research note today says all three are positioned for leadership in the “huge, nascent and underpenetrated” smartphone market. The smartphone, says Abramsky, is a uniquely transformational innovation in that it represents the convergence of four iconic technology markets–PC and computing, Internet, consumer electronics and wireless phones.
As interest in mobile email, mobile browsing and mobile applications grows, as handsets become more powerful and the networks on which they run improve, consumers will begin to bypassing PCs and the tethered Internet for the iPhone, the BlackBerry, the Pre and the mobile computing experience they offer. And that transition will create an enormous market opportunity for smartphone vendors like Apple (AAPL), RIM (RIMM) and Palm (PALM).
“Because of their convergence capabilities,” writes Abramsky, “we believe that smartphones possess the ability to capture users, revenues, market share and profits from not only the 1 billion unit+ per year handset market–but also from the PC market (300 million units per year), TVs (200 million units per year), personal media players (230 million units per year), digital cameras (125 million units per year), personal gaming devices (37 million units per year), portable navigation devices (32 million units per year) and other formerly discrete market segments.”
Bolstering his case, Abramsky adds, “At the end of calendar 2008, only 2.5% of the ~7 billion people in the world had smartphones and 24% had Internet access (only 8% are Internet subscribers, the difference being multi-user households and Internet cafes). A huge market opportunity for smartphones exists, given that globally there are 3.7 billion mobile phone subscribers, 2.5 billion consumer electronics users, 1.6 billion Internet users, and 1.1 billion PC users.” (Click on chart below to enlarge.)
Great news for Apple, RIM and Palm, which Abramsky sees as the market’s emerging leaders. And, as I noted earlier, great news for investor holding their shares. Says Abramsky: “We are raising our price targets on RIM from $100 to $150, on Apple from $190 to $250, and on Palm from $18 to $25, justified by increased market shares which, as visibility improves to the huge smartphone opportunity, offer upside to financials and potential multiple expansion.”
Comments
What if: the forthcoming Apple tablet could receive tv live, movies and video, gps maps, radio, music playing, store photos, do conference calls, take notes, read documents, surf the web, allowed bluetooth keyboards, remote control for whatever?
Now that would be convergence.
Posted by David Owens at August 18th, 2009 at 2:15 pmPalm???? Does this guy actually research his material.????? Palm has a functional smartphone but its sales are thru the floor. 100,000 last month??
Maybe Microsoft will buy them and make it a Zune phone. LOL
Just a thought.
Posted by elder norm at August 18th, 2009 at 8:02 pmen
Palm Pre sales have nothing to do with its quality. The Smartphone market is pretty entrenched and people don’t just switch phones on a whim. As a Pre user I have never considered changing my phone and I like it so much that I have made many converts from Blackberry and Apple to the Pre. The Pre’s only weakness is its lack of applications, but that is all in the not too far horizon.
Posted by darius arya at August 18th, 2009 at 9:29 pm