Apple Keeps Tablet Grip in ’12, Huawei Shines, Says Canaccord
By Tiernan Ray
Canaccord Genuity’s Mike Walkley this morning is among the many trying to piece together the implications of announcements this week at the Mobile World Congress that took place in Barcelona, Spain. (See last night’s roundup, and you can also hit the tag at left, ‘Mobile World Congress.’)
Walkley reiterates a Buy rating on Apple ( AAPL), Qualcomm ( QCOM), and Sierra Wireless ( SWIR), after concluding that smartphone and tablet computer sales will be “strong” this year.
He expects Apple to dominate the tablet market through the rest of this year, helped by the introduction of an iPad 3, expected next week. But the debut of tablets using Microsoft’s ( MSFT) Windows 8 will be a “catalyst” for the market later this year as well, he writes.
Apple will increase its market share and profit share of tablets this year, he writes.
“While Samsung appears to have the most competitive Android tablet offering, we view Windows 8 as a greater longer-term threat to Apple’s dominant iPad share than Android offerings longer-term.”
Walkley sees smartphone competition being “intense” this year, with Nokia ( NOK) bringing down the price of phones running Microsoft’s operating system, and “Android OEMs battling for smartphone market share.” The latter trend should be good for sales of Qualcomm’s “Snapdragon MSM8960” integrated 3G/4G chipset, he believes.
The company showing the biggest improvement at MWC was China’s Huawei ( 002502CN), thinks Walkley:
Building on its strong showing at CES, Huawei announced additional models of its high-end Ascend branded Android smartphones with the Ascend D quad using Huawei’s internally developed (through HiSilicon) quad core applications processor, representing one of the more surprising launches of the show. Huawei’s HiSilicon technologies announced its AP K3V2 for smartphones and tablets; the K3V2 is a quad core processor with four ARM A9 cores. While we believe Qualcomm remains a key supplier to Huawei, we were surprised Huawei announced its own applications processor at the show. We believe the Ascend D quad smartphone will start shipping in October and is a hero smartphone to build Huawei’s brand. As such, we believe the overwhelming majority of Huawei’s 2012 smartphone shipments will use Qualcomm’s Snapdragon MSMs. In our opinion, Huawei showcased the biggest one-year improvement in its smartphone portfolio, while also impressing investors with its target to triple smartphone shipment to 60M units in 2012. We note this 60M forecast was well above our expectations for Huawei to ship 38M units in 2012 versus 20M in 2011 and only 3M in 2010.
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