Fall sales confirm Apple strength

Initial data for October and November suggest Apple

Inc. had blockbuster smartphone sales while Black

Berry Ltd. continued to have “very weak sales.”

As a result, T. Michael Walkley, an analyst at Cannacord Genuity, raised his Q4 iPhone sales forecast to 52 million, from 51.5 million. For BlackBerry, however, he lowered his sales forecast to 19 million from 19.7 million units.

“Given BlackBerry’s announced exit of the consumer smartphone market and increasing competition from ever-more-capable lowcost Android smartphones in emerging markets, our surveys indicated rapid BB7 share losses,” he said. “In fact, we believe consumer BlackBerry sales are down more than 50% year-over-year.”

Mr. Walkley currently has a price target of $6 on Black- Berry, with a hold recommendation. He sees more positive trends for Apple. In addition to strong iPhone 5 sales, Mr. Walkley said the iPad Air launch also suggests very strong initial sales.

He rates Apple a buy with a US$580 price target. In addition, he speculates Apple could return some money to shareholders over the next year.

“We also believe the continued large share buyback program should contribute to a return to EPS growth in fiscal 2014/15,” he said.

But he warns the popularity of the devices has created supply headaches for Apple.

“Our global supply chain analysis and surveys indicate the iPad mini with retina display is supply constrained and could remain so throughout the first quarter of fiscal 2014.”