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Canaccord Genuity on Communications/Wireless Equipment: Strong March Checks - Updating Estimates For Potential Japan Supply Distruptions

April 4, 2011 12:59 PM EDT
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Canaccord Genuity on Communications/Wireless Equipment: Strong March Checks - Updating Estimates For Potential Japan Supply Distruptions

Canaccord analyst, Michael Walkley, said, "Our channel checks indicated strong March sell through trends at Verizon (NYSE: VZ) with continued solid sales of the iPhone 4 (Nasdaq: AAPL) that launched in February and initial strong sales of the recently launched first LTE smartphone, the HTC Thunderbolt. In addition, our checks indicated solid sales at AT&T (NYSE: T) with the iPhone 4 still dominating sales, but new Android smartphones also sold well. However, our checks indicated soft sales at both Sprint (NYSE: S) and T-Mobile."

"Apple: strong iPad 2 sales, solid iPhone 4 sales: Our monthly channel checks indicated continued strong sales of the iPhone 4, as it remained by far the top-selling smartphone at AT&T and the #1 selling smartphone at Verizon. Further, our checks indicated very strong sales of the iPad 2 with order wait times still at 3-4 weeks online and daily stock-outs of delivered inventory at both the Apple store and carrier channels."

"Qualcomm (Nasdaq: QCOM): near-term handset supply concerns, strong 3G smartphone demand continues: Our checks indicated strong sales of Snapdragon-based models such as the HTC Thunderbolt LTE smartphone at Verizon, HTC Inspire at AT&T, HTC EVO at Sprint, and HTC G2 and myTouch 4G at T-Mobile. While handset supply issues could impact June quarter industry sales and therefore September quarter QTL revenue, underlying 3G smartphone demand remains strong and Qualcomm remains a top pick."

"Motorola Mobility (NYSE: MMI): soft Atrix and XOOM sales could impact June guidance: Our checks indicated disappointing sales of the Motorola Atrix at AT&T and share losses at Verizon during March to the iPhone 4 and HTC Thunderbolt. With our checks also indicating slowing sales of the XOOM tablet, we have lowered our June quarter Motorola Mobility estimates well below consensus."

"We are reducing our Q2/11 handset unit estimates by 5% to 374M units (from 395M units) or down 2% sequentially compared to typical up 5%-8% Q2 sequential growth. Similarly, we have lowered our Q3/11 estimates to 389M from 419M reflecting our belief supply disruptions could extend into the September quarter...As a result, we have left our Q4/11 unit estimate basically unchanged at 459M units. Consistent with these changes, we are modeling 11.3% global handset unit growth in 2011 from 1.44B to 1.61B units (was 1.67B or 16.0% annual growth) and have left our 1.78B unit estimate for 2012 unchanged (10.6% annual growth)."


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