Friday, October 2, 2009
Morgan Stanley: iPhone Market Share Would Double Without Exclusivity
Add Morgan Stanley’s Kathryn Huberty to the list of analysts calling for Apple to broaden the iPhone’s distribution by ending carrier exclusivity deals. In a research note issued this morning, Huberty–noting that the iPhone’s market share grew 136 percent in France when Apple switched to multicarrier agreements there–said iPhone sales could more than double if the company took a similar tack in other countries.
Discussing Palm’s first-quarter results earlier this month, the company’s leadership claimed that “the vast majority of new sales” for the quarter were generated by the Pre. Palm sold some 823,000 handsets during that period with sell-through of 810,000 units, so that’s an impressive feat. But only if the sales we’re talking about here were made to on-the-street consumers. And, according to Town Hall research analyst David Eller, it’s not entirely clear that they were.
Palm CEO Jon Rubinstein likes to say smart-phone makers “don’t have to beat each other to prosper,” but it’s beginning to look like they–or, rather, Palm–might have to. Because while the Pre may have put Palm back in the game, it’s not clear how long it can keep it there.
Perhaps Palm really does have the “special sauce” needed to attain smart phone leadership, as RBC Capital Markets analyst Mike Abramsky recently claimed. Reporting first-quarter results this afternoon, the company posted a narrower-than-expected loss, said it shipped 823,000 smart phones during the quarter and announced plans for a common stock offering of 16 million shares.
Are sales of the Pre slowing or not? Without official numbers from Palm or Sprint, it’s nearly impossible to tell. But that hasn’t stopped analysts from taking a stab at it. Earlier this week, Pali research claimed Pre sales were tapering off. Now Pacific Crest is saying they remain “robust.”
According to some lines of code secreted away within webOS, Palm has at least one more handset in the pipeline–the so-called Eos (codename: Pixie). And while no one seems to know when it will arrive at market, there’s speculation today that we’ll see it by November, right in time for the winter holidays.
The iPhone 3GS has been on the market just 10 days now, and already a growing number of Apple stores around the country are running short of the device. It seems that demand for the 3GS, which topped one million units sold its first weekend at market, has exceeded even the company’s presumably aggressive targets.
Piper Jaffray analyst Gene Munster was right. The iPhone 3GS didn’t sell as well as the iPhone 3G did during its launch weekend last year. But it did quite a bit better than he thought. In an investment note issued this morning, Munster estimated the company sold 750,000 iPhones over the weekend.
Palm’s long-suffering investors are today basking in the company’s “new-ness”–specifically, a stock that’s continuing the big rally it began last week after the announcement of the Palm Pre handset and Web OS. As I write this, Palm is trading at $6.10–up an astonishing 85 percent since its big announcement. And it seems destined to go higher still, given the enthusiastic reception analysts have given it. 
