Smartphone sales poised to rocket even higher
Royal Bank of Canada analyst Mike Abramsky, who just seems to love Palm, just slathered some love on the entire smartphone market, declaring that “the new world order” of smartphones will be lead by Apple, Research in Motion, and Palm. To justify the lauding, Abramsky also raised his earnings estimates and stock price targets for all the stocks, pointing the way to highs not ever seen for Apple or RIM (and over seven years past for Palm).
Abramsky gets away with his lofted expectations by forecasting his estimate for global smartphone penetration to 35% by 2012, a number that he expects to amount to about 504 million units. This is a notable increase from his previous estimate of 395 million units for that same year. Abramsky isn’t the only one that is anticipating a surge in smartphone sales in the coming years, CNBC’s Jim Cramer also expects that mobile internet devices are going to take off and has been ranting about the “mobile internet tsunami” for weeks now, even creating an index of stocks to monitor the overall health of the smartphone market - including Apple, RIM, and Palm.
Clearly Apple and RIM are both “positioned for leadership” in the coming years, which is sort of obvious when you consider that they’re in leadership positions in the current market. But Abramsky also believes that once Palm gets over what he believes are short-term capital and mind-share issues it will be able to sit at the smartphone leadership table.
- Abramsky’s price target for Apple has been raised from $190 to $250 (an all-time high), with FY2011 estimates of $50.3 billion in revenue (18% growth over 2010 estimates) with 49.3 million iPhones sold and earnings per share of $8.25. AAPL currently trades around $160-$170.
- Research in Motion's price target was jacked up from $100 to $150, another all time high, with FY2011 estimates of $21.2 billion revenue (a 32% increase over 2010 estimates) and $5.43 earnings per share. RIMM is currently trading between $70-$80
- Palm’s target price was increased from $18 to $25, a point the stock has not seen since April 12, 2002, with FY2011 estimates of $3.2 billion in revenue (52% growth over 2010 estimates) and $0.75 earnings per share.
Near-term estimates for all three companies were also raised.
Of particular importance to us is why Abramsky thinks Palm deserves to ranked alongside Apple and RIM, despite the company’s desperate fiscal position and past blunders. He says that even though Palm does have these near-term challenges to overcome, the company still has the “special sauce” to lead, including the webOS operating system. Only time, and sales, will tell if that special sauce is enough.
Thanks to as147 in our forums for the tip!
Apple Genuinely Unhappy About Their Employees Going to Palm
The growing consensus is that yesterday's iTunes screenshots which showed Apple opening it up to 3rd party devices were faked. That's no surprise, really, because we didn't expect the heat between Palm and Apple to cool. Today we have a story at Bloomberg confirming that tensions between the two companies has actually been simmering for quite a long time.
Apparently back in 2007 - i.e. just when Palm was beginning the process of reinventing itself - Steve Jobs asked Ed Colligan to join a deal with Apple to not poach each others' employees. Bloomberg has the story:
Apple’s CEO, told Colligan he was concerned that Rubinstein was recruiting Apple employees. “We must do whatever we can to stop this,” Jobs said in the communications
Colligan rebuffed jobs, calling the suggestion "likely illegal." The rest, as you know, is history - Palm went on a former Apple employee hiring binge. It had already started with now-CEO Jon Rubinstein and went up and down the chain. Steve Jobs was reported to be very angry about Palm hiring Apple engineers - Fake Steve Jobs' post back in January 08 on the subject is starting to look less like parody and more like prescience.
The proposed deal, if it happened and if it had gone through, likely would have been illegal enough for the Department of Justice to investigate, writes Bloomberg. Indeed, the specter of such an investigation may have spurred Palm to release the relevant documents to Bloomberg in the first place.
The interesting twist here is that we've heard rumors of Apple actually having such a deal with Google. What this looks like to me is that Palm letting it be known to the world that their main competitor has a history of this sort of thing in light of a possible DOJ investigation into Apple/Google collusion.
If this were a Fake Jon Rubinstein blog, I'd be writing "Hm, the government is investigating ties between Apple and Google? Turns out they have a history of trying to make these deals. I'm not saying, I'm just saying."
If you thought Palm had chutzpah before with the iTunes back and forth, how do you like these Apples?
[via The iPhone Blog]