RBC on AAPL PALM RIM

Three American firms are ultimately going to take control of the smartphone business, RBC Capital Markets analyst Mike Abramsky said today in a research note. He believes that Apple, BlackBerry maker Research in Motion and eventually Palm are all "positioned for leadership" and should command the smartphone market when it reaches 35 percent of all phones, or over 500 million smartphones, by 2012. They represent the few companies that properly integrate the hardware and software from top to bottom, according to the analyst.

"[These] challengers will dominate the smart phone market, given their deep vertical integration and 'special sauce' through which they create unique, iconic smart-phone experiences," Abramsky wrote.

Following suit, the financial expert has raised his stock value estimates for all three companies. RIM received the largest help and saw its share target climb from $100 to $150 per share, but both Apple and Palm received large upgrades to $250 (up from $190) and $25 (from $18) respectively. He singles out Apple and RIM as particularly standing to benefit as they could triple their revenues from phones in the next three years.

Instead of newcomers, it should be incumbent cellphone hardware and software manufacturers that will fail, the note reads. LG, Motorola, Nokia and Sony Ericsson are all predicted to lose market share as they either cling to inferior technology, risk cannibalizing their own sales of other phone models or objections by shareholders that prevent them from properly entering the category. Traditional PC companies that have limited experience in either PDAs or smartphones, such as Dell and HP, are also suspected of sharing the same fate.

The analysis doesn't single out software developers like Google or Microsoft, though it's known the former works more closely with phone designers and insists that those Android phones which also have the Google label meet a certain minimum experience.

By Electronista Staff