Bear Stearns ups Apple target to $125, says Palm at risk to iPhone

Posted:
in General Discussion edited January 2014
Apple's new iPhone presents a serious risk to PDA-maker Palm, according to Bear Stears, who on Wednesday raised estimates and increased its price objective on Apple.



"With over 1 billion unit shipments expected to ship in 2007, mobile phones represent a significant growth opportunity for Apple, coupled with video which is also in its early stages and could evolve into a multi-year story," analyst Andy Neff told clients in a research note to clients on Wednesday.



He said Apple is likely to face number of challenges in its new phone initiative -- such as entrenched competitors with significant scale and wireless expertise and establishing/maintaining carrier relationships -- but believes the device could potentially revolutionize the mobile phone industry in very much the same way the iPod forever altered the landscape of music.



Apple, while introducing iPhone on Tuesday, said it will initially shoot for 1 percent of that global handset market -- an approximate 10 million units.



"We believe that iPhone represents a significant risk to Palm given its device-only model with similar average-selling-price to iPhone and its carrier concentration with Cingular," Neff wrote. He also cited Palm's "lack of innovation" as yet another cause for concern.



But contrary to initial market reaction, Blackberry manufacturer Research In Motion Limited (RIMM) may experience minimal impact from Apple's first handset in the near term, the analyst said.



"While iPhone may emerge as a competitive smartphone, we would buy RIMM on weakness given iPhone?s lack of corporate email, price premium vs. RIMM, and sole availability at Cingular and in US," he explained.



Along similar lines, Neff said iPhone could wind up reflecting positively on Synaptics, whose Onyx touch solution may come under high demand as would-be competitors line up in attempts duplicate the user interface experience of the new Apple handset.



Stacking the iPhone against the competition | Source: Bear Stearns.



The analyst expects Apple will sell around 600,000 units of its initial iPhone handset during the fiscal 2007 year, which ends in September. However, he's modeling for that number to surge to 9.25 million units the following year.



Neff reiterated his Outperform rating on shares of Apple, raising his 12-month price target to $125 from $100.
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Comments

  • Reply 1 of 35
    If Apple did sell 10 million of these, what would be its penetration into the smart phone market? Jobs put it up against the entire cell phone market which I don't think is fair.
  • Reply 2 of 35
    crees!crees! Posts: 501member
    For pure joy, could someone post the quote from the PALM CEO about Apple's entry into the phone market? The guy probably crapped himself a few times when he saw/heard about the iPhone.
  • Reply 3 of 35
    I doubt touch screen is going to become pervasive in this space, at least in use by other devices... the patents Apple has regarding its screen and uses are profound.
  • Reply 4 of 35
    MarvinMarvin Posts: 14,540moderator
    Quote:
    Originally Posted by DeaPeaJay View Post


    If Apple did sell 10 million of these, what would be its penetration into the smart phone market? Jobs put it up against the entire cell phone market which I don't think is fair.



    There are estimates that the smartphone market sells maybe 50 million units a year so a fair bit smaller than the 1 billion figure Jobs was using, which represents all the phones. If Apple did sell 10 million units then that equates to a 20% share. I'd say that would be a reasonable assessment weighing up how much more functional it is than other smartphones but also taking into consideration it's carrier limitations and the fact it is a new entrant into the market.
  • Reply 5 of 35
    Quote:

    "We've learned and struggled for a few years here figuring out how to make a decent phone,'' he said. "PC guys are not going to just figure this out. They're not going to just walk in.''



    hehehe!
  • Reply 6 of 35
    Quote:
    Originally Posted by crees! View Post


    For pure joy, could someone post the quote from the PALM CEO about Apple's entry into the phone market? The guy probably crapped himself a few times when he saw/heard about the iPhone.



    "Palm CEO Ed Colligan has revealed disinterest in Apple's forthcoming iPhone cellular handset when questioned about the matter at a breakfast gathering, according to the Mercury News, and laughed at the idea that any company -- including Apple -- could easily draw customers in the difficult smart-phone sector. "We've learned and struggled for a few years here figuring out how to make a decent phone," Colligan said. "PC guys are not going to just figure this out. They're not going to just walk in.""



    Yeah, he's definitely in the market for new underwear....
  • Reply 7 of 35
    mobiusmobius Posts: 378member
    I think the difference is, Apple aren't just starting from scratch. They've had experience before with these kind of devices, so they have also learned and struggled over the years. Plus they have total control over their hardware and software, unlike Palm.
  • Reply 8 of 35
    mobiusmobius Posts: 378member
    Hello namesake Mobius Boston.
  • Reply 9 of 35
    Quote:
    Originally Posted by crees! View Post


    For pure joy, could someone post the quote from the PALM CEO about Apple's entry into the phone market? The guy probably crapped himself a few times when he saw/heard about the iPhone.



    "Palm CEO Ed Colligan has revealed disinterest in Apple's forthcoming iPhone cellular handset when questioned about the matter at a breakfast gathering, according to the Mercury News, and laughed at the idea that any company -- including Apple -- could easily draw customers in the difficult smart-phone sector. "We've learned and struggled for a few years here figuring out how to make a decent phone," Colligan said. "PC guys are not going to just figure this out. They're not going to just walk in.""
  • Reply 10 of 35
    eckingecking Posts: 1,588member
    A stock split is on the horizon....damn I wish I bought some.
  • Reply 11 of 35
    bdkennedy1bdkennedy1 Posts: 1,459member
    I didn't realize how asleep the cel phone industry was since the iPhone came out. It makes my Motorola RAZR feel like my brick phone from the early 90's.
  • Reply 12 of 35
    Quote:
    Originally Posted by Mobius View Post


    Hello namesake Mobius Boston.



    Back 'atcha Mobius.
  • Reply 13 of 35
    bdkennedy1bdkennedy1 Posts: 1,459member
    Quote:
    Originally Posted by Mobius Boston View Post


    "Palm CEO Ed Colligan has revealed disinterest in Apple's forthcoming iPhone cellular handset when questioned about the matter at a breakfast gathering, according to the Mercury News, and laughed at the idea that any company -- including Apple -- could easily draw customers in the difficult smart-phone sector. "We've learned and struggled for a few years here figuring out how to make a decent phone," Colligan said. "PC guys are not going to just figure this out. They're not going to just walk in."



    When you have ingenuity, style and common sense, you can buid anything. All the iPhone is is the right technology and common sense.
  • Reply 14 of 35
    Quote:
    Originally Posted by Mobius Boston View Post


    "Palm CEO Ed Colligan has revealed disinterest in Apple's forthcoming iPhone cellular handset when questioned about the matter at a breakfast gathering, according to the Mercury News, and laughed at the idea that any company -- including Apple -- could easily draw customers in the difficult smart-phone sector. "We've learned and struggled for a few years here figuring out how to make a decent phone," Colligan said. "PC guys are not going to just figure this out. They're not going to just walk in.""



    Yeah, he's definitely in the market for new underwear....



    The Palm Developers conference is going to be a ghost town.

    The WWDC should be interesting this year.

    The iPhone really represents a whole new platform with amazing opportunities.
  • Reply 15 of 35
    Quote:
    Originally Posted by Johnny Mozzarella View Post


    The Palm Developers conference is going to be a ghost town.

    The WWDC should be interesting this year.

    The iPhone really represents a whole new platform with amazing opportunities.



    There's still some debate as to whether Apple will open up iPhone to 3rd Party developers yet.



    The analyst is slightly wrong here too. iPhone supports IMAP IDLE for push email. So does Microsoft Exchange. He's only slightly wrong though as IMAP access isn't enabled by default in Exchange so it takes a clued up IT manager to open up their Exchange server to non-MS clients. However, it's essentially FREE, unlike RIM's solution.
  • Reply 16 of 35
    The comparison table is totally flawed. Apparently they don't know what they're talking about. The Treo 680 runs a Microsoft operating system and works with IntelliSync? Bullsh*t.
  • Reply 17 of 35
    The potential lies not only in the current smartphony market, but in a market that has not yet been fully exploited. If they can figure out a way for us to use internet, messaging, etc. using wi-fi for free, as in when i am at starbucks or wherever there is a signal (from my next door neighbor) without additional contracts, then the potential will be major . If however we will have to pay a massive chunk of change in addition to the basic phone plan that most of us already have, for access to the cool stuff, then the potential will be more limited, but still big.



    I always thought that smartphones were for business people, the kind with work that just can't wait sometimes. This iPhone makes me think that a smartphone can also be for the masses, just like a regular cell phone is, or a laptop.
  • Reply 18 of 35
    backtomacbacktomac Posts: 4,579member
    When Apple releases a scaled down version for $199 those estimates are going to look to low. The only question is, will they do it this year or next? I think it'll happen by this fall. Remember everyone thought this was iPhone 2.0.
  • Reply 19 of 35
    solsunsolsun Posts: 763member
    Quote:
    Originally Posted by AppleInsider View Post


    Along similar lines, Neff said iPhone could wind up reflecting positively on Synaptics, whose Onyx touch solution may come under high demand as would-be competitors line up in attempts duplicate the user interface experience of the new Apple handset.





    I guess Neff missed the part of the keynote where Jobs said "We have over two hundred inventions and patents on this thig... And we intend to protect it."
  • Reply 20 of 35
    Quote:
    Originally Posted by ecking View Post


    A stock split is on the horizon....damn I wish I bought some.



    I almost bought 100 shares back in July, when it was trading below $55. I knew it was on a BARGAIN sale but I was fresh out of college and had student debts to pay let alone 5 grand to spend on stock.



    Needless to say, if I just decided to starve for a couple months and bought the stock, and it does hit $125, I could have knocked a considerable chunk off my student loans.



    And if it splits (I think it will once it hits 110-120).....oh man, I am kicking myself in the a** as I type this.
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