Barron's: AAPL iPhone Backlogged, Galaxy S III Slips, ‘BB10′ DOA, Says Pacific Crest
background for rumblers
The iPhone 5 is beginning to assert its presence across the board, and the plastic-y, cheesy, Samsung Galaxy models are becoming overstocked shelf inventory. Next week's story? We wonder if the galaxy 3 is going to set records for the highest number of returns within the 30 day windows. LOL Anyone who has actually played around with one knows they are teh suk vs the iPhones and iOS they are blatantly trying to copy.
Regarding patent settlements, HTC has agreed to pay AAPL royalties of somthing like $8-10/phone to settle outstanding litigation between the Companies, and we share the learned view that this will be the precedent for other settlements with OEMs copying AAPL products. Samsung's commentary yesterday that they have no interest in settling anything with AAPL is no surprise -- those are scripted comments from the lawyers getting rich prolonging the IP litigation. In the end, it seems highly likely to us that Samsung will be paying somewhere in the $8-10 per device (phones and pads) to AAPL, and the longer Samdung waits, the more likely it is that the long term-relationship they might otherwise have with AAPL will be lost to other suppliers for AAPL.
Here's the excerpt from the Barron's piece.
By Tiernan Ray
Pacific Crest’s James Faucette today weighs in with his “checks” of smartphone sales in the U.S. and abroad, his findings being, in brief: more expensive phones like the iPhone are still tops in North America, but cheaper models such as the Samsung Electronics (005930KS) “Galaxy Ace” and “Galaxy Y.”[sic]
Faucette writes that Apple (AAPL) with respect to the iPhone 5 “continues to work through iPhone 5 backlog of roughly one to three weeks, depending on the channel and carrier.” As a consequence, “component suppliers with meaningful exposure to Apple would begin to see the potential for Q1 upside.”
Samsung’s Galaxy S III is cooling, he thinks: Our checks indicate that Galaxy S III sales continued on a steady decline while we detected inventory levels which were somewhat higher than a month ago. We estimate that developed-market inventory levels for the Galaxy SIII are now at the high end of the carriers’ targeted range.
Samsung’s “Galaxy Note II” phone/tablet combo, is experiencing “low demand” in developed markets, though he’s not surprised...Faucette has bad news for Research in Motion (RIMM), whose BlackBerrys are “disappearing in North America.”
“Our checks found some retail locations at each of the U.S. big four carriers that were not actively stocking BlackBerry products.”
Faucette’s take on RIMM itself is to reiterate his Underperform rating, predicting that the coming revamp of the BlackBerry operating system, dubbed “BB10,” which is due sometime in Q1, will be “dead on arrival” and that a sale of the company is now too late:
We expect the new OS to be met with a lukewarm re- sponse at best and ultimately likely to fail due to the new and unfamiliar UI, lack of complementary devices, relatively few applications and what we believe to be a general reticence by app developers to develop for the platform... We do not expect these products to gain meaningful traction outside of the purest of BlackBerry loyalists....