Apple Upgrade Has Competitive Implications (AAPL, GOOG, MSFT, RIMM)

In a new research call this morning, Collins Stewart rated Apple Inc. (NASDAQ: AAPL) to a Buy rating.  The research call has some serious implications for Google Inc. (NASDAQ: GOOG) on the Android platform, but may have broader implications for Microsoft Corp. (NASDAQ: MSFT) and Research in Motion Ltd. (NASDAQ: RIMM) for Windows Mobile and Blackberry.  The call is based on Google’s Android and Apple OS as being winners in the smart phone battle.

Collins Stewart’s research noted that a critical mass of carrier and OEM sponsorship, Google’s Android open platform is positioned to be a winner in the smart phone segment.  Apple’s new operating system with a new line of product launches and lower prices may allow it to take away market share from Research-in-Motion Ltd.’s (NASDAQ: RIMM) BlackBerry and even Microsoft (NASDAQ: MSFT) Windows Mobile phones.  China Mobile (NYSE: CHU) is an added catalyst, as is the 2010 iPhone nano.  All combined, this should allow Apple to grow market share in the smartphone segment.

The one issue that was a slight concern is the notion that iPod revenue will “remain structurally challenging” because of market saturation and cannibalization.  The launch of Windows 7 and Apple’s lack of competitive pricing is another issue.  Collins Stewart is not looking for defections but believes Apple will do no better than maintain its current market share.  It even called a positive surprise possibly form touch screen tablet PC’s in the second half of this year.

Despite some caution, this research note’s summary is that Apple remains in pole position for monetizing revenue opportunities for mobile web devices.  The price target is $170.00 based upon the most recent chart breakout.

Jon C. Ogg
June 3, 2009