Canaccord Genuity Communications Technology 2012 Sector Outlook: AAPL, QCOM & SWIR Top Picks

Canaccord Genuity Communications Technology Sector Outlook by T. Michael Walkley

Walkley said, "While we anticipate global handset units will increase by 7% YoY in 2012 to 1.72B units, we anticipate much faster growth trends for the smartphone market. In fact, we are modeling 481M smartphone units in 2011 ramping to 650M units in 2012, or 35% YoY growth. We believe Apple (Nasdaq: AAPL) and Qualcomm (Nasdaq: QCOM) are best positioned to benefit from growing smartphone trends."

"With leading North American carriers such as Verizon (NYSE: VZ), AT&T (NYSE: T) and Sprint (NYSE: S) upgrading wireless networks to 4G LTE, we anticipate LTE smartphones will increase in the sales mix and sales of LTE mobile computing products will increase as well. Further, with carriers identifying new markets to grow total subscriptions in order to monetize large infrastructure investments, we anticipate continued steady growth in several M2M verticals including automotive, asset tracking, networking, and smart grid. As a result, we anticipate Sierra Wireless (Nasdaq: SWIR) should benefit from these trends and is a top small cap pick for 2012."

Apple and Qualcomm – Top Large Cap Picks For 2012..."with RIM (Nasdaq: RIMM) and Nokia (NYSE: NOK) attempting to execute new strategies in order to revitalize their smartphone fortunes and with OEMs within the Android smartphone market competing with very fast product cycles, smartphone OEMs are increasingly choosing Qualcomm integrated MSMs. As such, we believe investors should own smartphone leader Apple and its growing iOS market share, and leading smartphone supplier Qualcomm rather than OEMs facing intensifying competition through using either Android or Windows OS (Nasdaq: MSFT)."

Sierra Wireless – Best Small Cap Pick For 2012...With leading North American operators upgrading to 4G LTE technologies, we believe Sierra Wireless is well positioned to benefit through increased USB dongle, mobile hotspot, and embedded laptop connectivity sales, particularly with AT&T in 2012. Further, we believe Sierra Wireless’s growing M2M franchise remains a longer-term driver for stable earnings growth. As such, we believe Sierra Wireless is a compelling small cap investment for 2012."

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