John Paczkowski

Recent Posts by John Paczkowski

Spare Change for Apple, RIM or Palm Shares?

iphonezillaWise is the investor holding shares in Apple, Research in Motion and/or Palm, because these companies are the triumvirate of tech’s new world order.

This according to RBC Capital Markets analyst Mike Abramsky, who in a research note today says all three are positioned for leadership in the “huge, nascent and underpenetrated” smartphone market. The smartphone, says Abramsky, is a uniquely transformational innovation in that it represents the convergence of four iconic technology markets–PC and computing, Internet, consumer electronics and wireless phones.

As interest in mobile email, mobile browsing and mobile applications grows, as handsets become more powerful and the networks on which they run improve, consumers will begin to bypassing PCs and the tethered Internet for the iPhone, the BlackBerry, the Pre and the mobile computing experience they offer. And that transition will create an enormous market opportunity for smartphone vendors like Apple (AAPL), RIM (RIMM) and Palm (PALM).

“Because of their convergence capabilities,” writes Abramsky, “we believe that smartphones possess the ability to capture users, revenues, market share and profits from not only the 1 billion unit+ per year handset market–but also from the PC market (300 million units per year), TVs (200 million units per year), personal media players (230 million units per year), digital cameras (125 million units per year), personal gaming devices (37 million units per year), portable navigation devices (32 million units per year) and other formerly discrete market segments.”

Bolstering his case, Abramsky adds, “At the end of calendar 2008, only 2.5% of the ~7 billion people in the world had smartphones and 24% had Internet access (only 8% are Internet subscribers, the difference being multi-user households and Internet cafes). A huge market opportunity for smartphones exists, given that globally there are 3.7 billion mobile phone subscribers, 2.5 billion consumer electronics users, 1.6 billion Internet users, and 1.1 billion PC users.” (Click on chart below to enlarge.)


Great news for Apple, RIM and Palm, which Abramsky sees as the market’s emerging leaders. And, as I noted earlier, great news for investor holding their shares. Says Abramsky: “We are raising our price targets on RIM from $100 to $150, on Apple from $190 to $250, and on Palm from $18 to $25, justified by increased market shares which, as visibility improves to the huge smartphone opportunity, offer upside to financials and potential multiple expansion.”

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The problem with the Billionaire Savior phase of the newspaper collapse has always been that billionaires don’t tend to like the kind of authority-questioning journalism that upsets the status quo.

— Ryan Chittum, writing in the Columbia Journalism Review about the promise of Pierre Omidyar’s new media venture with Glenn Greenwald