Based on continued strong sell-through trends for Apple's iPad and iPhone, Canaccord Genuity technology analyst Michael Walkley said he believed Apple will maintain both market and value share leadership in the fast-growing mobile device market. Walkley's report maintained the firm's "buy" rating for the company, and noted strong sell-through indication trends for iPads with growing distribution and improved supply. As a result, Walkley increased his iPad unit estimates from 5 million to 6.3 million for the fourth quarter of 2010.
The report concluded Apple has set the standard for the tablet market, and predicted its aggressive pricing would make it tough for competitors to compete longer-term. In fact, given Apple's strong ecosystem of applications and leading tablet form factor, the report projected the competing tablet products would need to sell at a substantial discount of roughly $200 to effectively compete with Apple. Walkley noted at this level of discount, he believed competitors could struggle to reach sustainable profits, and predicted Apple would maintain dominant tablet market share.
"Our monthly channel checks indicated continued strong sales of the iPhone 4, as it remained by far the top-selling smartphone at AT&T despite the new Windows 7 smartphones and a reduction in BlackBerry Torch prices from $199 to $99," his report noted. "We believe a CDMA iPhone will launch during Q1/C2011, with a likely launch during February, and we anticipate strong iPhone sales at Verizon during H1/C2011 could slow Android momentum."
Walkley's report anticipated Apple's tablet market share would exceed 75 percent in C2010 and reach roughly 50 percent unit market share in 2011. However, the report also noted Apple's share of profits for the tablet market would be well above 80 percent in both C2010 and C2011. "Finally, we expect iPhone 5 will launch in mid-C2011 and continue to drive strong global iPhone sales," the report concluded. "As such, we anticipate a CDMA iPhone followed by the iPhone 5 will drive continued strong smartphone sales for Apple, enabling Apple to maintain its impressive value share."
The report comes on the heels of comments from an analyst at Ticonderoga Securities, who said Apple's holiday sales would remain strong, due to a combination of Apple's iPad, iPhone 4, refreshed iPod/iPod Touch portfolio, the new MacBook Air and Apple TV products. "Regardless of the overall strength during Black Friday and the holiday season at large, we believe Apple has the products that consumers demand," analyst Brian White wrote in a Nov. 29 research note.
A recent report from research firm Nielsen also forecast a rosy future for Apple products, noting the company's iOS (along with Google's Android operating system) are the most coveted mobile platforms for current smartphone users looking to upgrade in 2011. Desire for Apple's iPhone was greater than Android and all others among those aged 18 to 24, 25 to 34, and 55 and older, the report found, with some 35 percent of current smartphone owners saing they would pick an iPhone. In comparison, only five percent of those surveyed said they would choose a Windows Mobile smartphone.