Smartphone Intelligence Report: Research in Motion, Palm and Apple

Includes: AAPL, BBRY, PALM
by: William Trent, CFA

I took a look through recent conference calls to get a feel for conditions in the smartphone segment.

First, we are pleased to report smartphone sell-through grew 34% to 2.7 million units for the year and now represents 80% of our total revenue, up from 69% last year. In the fourth quarter, our smartphones sell-through reached a record high, 750,000 units, up 43% year-over-year...

Smartphone revenue grew 15% to $1.25 billion on unit shipments of 2.7 million. Unit sell-through for smartphones grew 34% year-over-year to 2.7 million units, while overall channel inventories remained flat...

(Excerpt from full PALM conference call transcript)

Revenue for the first quarter ended June 2, was $1.08 billion, up 16% from $930 million in the previous quarter. Handheld devices represented $824 million, or 76% of RIM's revenue during the quarter, up from the 73% of total revenue in the previous quarter. Total devices shipped in the quarter were approximately 2.4 million, and were up from 2 million in the prior quarter. Approximately 2.2 million new devices were activated in the Q1, either for new customers or for replacements and upgrades.

(Excerpt from full Research in Motion (RIMM) conference call transcript)

Given that Palm and RIMM have the most exposure to smartphones, the two provide an interesting contrast. RIMM is selling nearly as many in a quarter as Palm did for the year. Both Palm's Treo and RIMM's Blackberry are sold worldwide on many carrier networks and in several varieties. Yet a certain upstart selling one model on one carrier network thinks it can catch up with RIMM.

Finally, we reiterate our goal of selling 10 million iPhones in calendar 2008.

(Excerpt from full Apple (NASDAQ:AAPL) conference call transcript)

Expressed as 1% of handset units that doesn't sound like much. Yet when compared to the success built up over many years by a company considered very successful it appears audacious.