Why?

They’re far too worried about what would happen to their customer-retention rates if they did so.

“We continue to believe carriers would lower iPhone subsidies if they collectively felt that competing devices would drive the same economics as iPhones,” says BMO Capital’s Keith Bachman. But right now, they don’t. And with no other hero handset to mitigate the risks of the spike in customer churn that might follow a reduction in iPhone subsidy, we’re unlikely to see one in the near term.

There are other reasons, as well, one being the presumed launch of a new LTE iPhone. That device will likely inspire a strong surge of upgrades late in the year. And with carriers looking to move subscribers onto their LTE networks, they’re probably not going to mess with a device that will surely be instrumental in helping them do it.

Finally, as we’ve noted here before, Apple’s multiyear agreements with its carrier partners very likely prevent them from changing iPhone subsidy pricing. These deals are said to have most-favored-nation clauses, so that any reduction in subsidy offered to one carrier would have to be offered to the others. And with Verizon and Sprint both newly locked into their contracts for some time, Apple has no cause whatsoever to even entertain the idea of a lower iPhone subsdidy.

One highlight, Keirstead writes, appears to be Salesforce’s Service Cloud, the service that companies use to track customer complaints on the Web and social media sites. Meanwhile, the average size of deals is climbing as large companies are buying incrementally more expensive versions of different Salesforce products.

And even though Salesforce missed on billings last quarter, prompting a nasty selloff of its shares the next day, Keirstead is unconvinced that was called for. “While the bear case is rooted in a view that the modest October quarter billings miss was a harbinger of slowing momentum, we just don’t see it,” he wrote. One source told him that Salesforce’s reps pushed the social products like Chatter a little harder to the detriment of other core products.

He expects Salesforce to make up for that billings miss this time around: He looks for unbilled backlog to grow 40 percent to $2.1 billion and for operating cash flow to grow by 20 percent, which is good, but still below the previously forecast range. All things considered, Salesforce, he says, may be undervalued. It’s currently trading at less than six times projected sales in fiscal 2013. He rates it with an “outperform,” and gives it a $150 price target.

HP shares have been bashed about in recent days, in no small part because of the dismal revenue outlook issued by rival Dell on Tuesday, and also on the heels of a downgrade by BMO Capital analyst Keith Bachman. Word that the TouchPad tablet isn’t selling well at Best Buy didn’t help. Dell shares gave up more than 10 percent of their value, and HP shares appeared to fall in sympathy by nearly four percent, closing at $31.39, or more than 36 percent off their 52-week peak.

So, what to expect? More lowered estimates, if Bachman is to be believed. In a note to clients Wednesday, Bachman cut his rating on HP to “market perform” from “outperform,” even though HP is trading at an inexpensive valuation. “Poor execution, low revenue growth and negative operating income growth” have caused him to slash his price target on HP to $36 from $43.

Bachman said he expects HP to fall short on PC sales, which may cause it to miss its previously issued revenue guidance. “We think HP will modestly miss July top-line estimates, and more meaningfully miss current top-line estimates for HP’s October quarter,” he wrote.

The consensus view of analysts calls for HP to report per-share earnings of $1.09 on revenue of $31.2 billion.

Chris Whitmore, an analyst at Deutsche Bank, wasn’t quite so dour as Bachman, though he wasn’t exactly whistling Dixie about HP’s prospects, either. Saying he expects HP to report results that are in line with the consensus expectations, Whitmore wrote in an Aug. 14 note to clients that he sees a “modest risk to revenue expectations.” The continuing investment to beef up HP’s investment in the services business will put some pressure on future earnings potential, Whitmore worries.

Citing checks of HP’s supply chain and distribution channel, Shaw Wu of Sterne Agee said in a note to clients yesterday that he thinks HP will “meet or exceed” the consensus estimates, and that, as in recent quarters, enterprise hardware sales will be stronger than consumer PC and device sales. “We believe this favorable product mix, in addition to lower component costs, should benefit gross margin,” he wrote. At least there’s one vote of confidence.

Back to services for a moment. HP’s long-term strategy has been to transform itself into a bigger player in IT services, so that it can rely less on sales of personal computers and printers, both of which are subject to violent sales-cycle swings. It’s a strategy that worked out well for IBM, and the $14 billion acquisition of EDS in 2008 was a key part of it.

During HP’s last earnings call in May, Apotheker grumbled that under previous CEO Mark Hurd, now a president at Oracle, HP “over-executed operationally and under-invested strategically.” Essentially, Apotheker blamed Hurd — known as an aggressive cost-cutter — for cutting too deeply without making sufficient investments to fuel growth in higher-profit lines of businesslike services. As a result, Apotheker explained, some expensive investments would be needed over the next several quarters to get that services business where it needs to be, and these investments would eat into results for the next several quarters. (You can hear him explain it himself in a CNBC video from May, below.)

It will be interesting to see if that “Hurd’s fault” narrative is still on the table. If it is, it’s not likely to fall on sympathetic ears. In his downgrade note, Bachman at BMO criticized HP harshly for pressing this message. “We suspect that management will make the point that previous management cut HP too much. However, previous management did not provide guidance, and then miss for three quarters, particularly right after having an analyst event. We would leave blaming the previous administration to politicians — it does not work with investors.” Ouch.

Why?

After the vicious beating the market has given Palm (PALM) these past few months, the company’s stock–down a gruesome 75 percent since October–already well reflects its woes and the challenges it faces. And it’s still conceivable that the company may end up an acquisition target. So there’s that as well.

“We continue to view Palm as one of the share losers in the high-growth Smartphone segment,” Long wrote. “In our view, the company is too small to compete and the internally developed WebOS operating system is no longer a major differentiator. The end game for Palm is most likely to combine with a large OEM that wants to own its operating system and can leverage its brand and distribution platform.”

FURTHER READING:

• Good Luck Competing on the iPhone’s Home Turf, Palm
• Exercise in Futility? Palm Pre Plus, Pixi Plus Headed to AT&T
• Palm: Pssst. Wanna Buy 1.15 Million Smartphones?
• Palm Pileup: Weak Smartphone Sales and a Gruesome Q4 Forecast
• Could Be Worse, Could Be Raining: Palm’s AT&T Launch Delayed?
• Could WebOS Licensing Be Palm’s Salvation?
• Palm’s Salvation? Less Push, More Pull.
• And if Palm’s Project JumpStart Doesn’t Work Out, There’s Always “Project Defibrillator”
• Double Face-Palm: Analysts React to Palm’s Lowered Guidance
• Time to Start Looking for a Buyer, Palm?
• 2010: Year of the Palm? Maybe Not…
• Analyst: Palm May Be Acquired in the Next Two Years

A number of analysts issued pre-earnings notes this morning and brought down numbers; these follow previous cautionary comments from analysts at Barclays, Merrill Lynch, Goldman, BMO Capital, Citigroup and Credit Suisse.

Cowen’s Louis Miscioscia today repeated his Outperform rating on the stock, but slashed his estimates. He now sees EPS of 31 cents for the October quarter, down from 34 cents; 30 cents for the January quarter, down from 35 cents; $1.30 for the January 2009 fiscal year, down from $1.39; and $1.25 for fiscal 2010, down from $1.49.

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In a research note this morning, Bachman takes a look at the direction Apple is likely to provide on September quarter numbers. He notes that in the past, the company has guided to 3 to 5 percent sequential revenue growth in the September quarter, which he notes would suggest revenue of $7.7 billion to $7.75 billion, versus the current consensus of $8.27 billion. He notes that iPhone sales in the quarter should jump to north of four million from around 700,000 in the June quarter, but that most of the revenue is deferred, given the company’s policy of recognizing revenue from the phone over a two-year period. Bachman thinks Apple could guide EPS for the quarter to $1 a share, versus the Street consensus of $1.24.

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For the June quarter, Bachman thinks Apple shipped 2.4 million to 2.5 million Macs, providing 39% year-over-year unit growth. For calendar 2009, he expects Apple CPU units to increase 26%, well above the 11.5%-12% growth he expects in the overall PC market.

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