CES 2012: Smartphones Should Overshadow Tablets

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Forbes.com, Winter, 2012. This article was placed on behalf of the U.S. based equity research effort of institutional broker and investment bank Canaccord Genuity. It was part of a series of articles developed under an agreement with forbes.com to work with a variety of contributors and assist them in delivering actionable investment ideas each week. The site, forbes.com is one of the top 500 sites in the world with nearly 10 million subscribers and approximately 100 million page views a month.

A little less than a week before day one of the 2012 Consumer Electronics Show (CES), Canaccord Genuity analyst Bobby Burleson previewed the conference, noting that focus is shifting away from tablets. Mr. Burleson said:

“While we expect numerous Android tablets to be on display during next week’s annual Consumer Electronics Show (CES) in Las Vegas, a lack of strong sell-through for devices ex-iPad or Kindle Fire should dampen tablet enthusiasm, in our view, despite the recent release of Google’s (GOOG) Ice Cream Sandwich [operating system].”

Mr. Burleson also noted the anticipated effect of the conference on major tech companies involved. “Following CES-related enthusiasm, we believe PC demand is likely to hold back shares of Intel (INTC) and NVIDIA (NVDA), while Atmel (ATML) could trade sideways as investors wait for another number cut on weak industrial and comms demand.”

He added three key considerations to look for going into the conference.

• Ultrabooks too expensive? “Expect dozens of new devices, but questions linger aboutdemand and pricing in the current weak economy. We believe Intel is attempting toenable lower prices through rebates.”

• Win8 too late for positive 2012 impact? “The first Win8-based devices likely won’t beavailable for purchase until after back-to-school, which could prompt consumer hesitation in Q3.”

• Smartphone growth going low-end? “While quad-core smartphones will be announced,growth looks poised to explode for the sub-$200 segment in 2012. We expect Atmelhas wins in this segment with its maXTouch 112E product family; NVIDIA’s appsprocessors should continue to play exclusively at the high end.”