RBC: Apple, RIM, Palm Could See Revenues Triple by 2012

Palm Inc. (NASDAQ:PALM) had its price target upgraded by RBC’s Capital analyst Mike Abramsky on Tuesday. In a report to clients Abramsky concludes that while facing near-term challenges, the “New Palm” in RBC’s view has the “special sauce” necessary to help lead the smart phone market. This includes its management team, ground-up designed WebOS platform, and unique innovations.

In his analysis Abramsky said he expects smart phones to take 35% of the handset market by FY2012 – which he projects will mean more than 500 million units. That’s up from his previous forecast of 395 million.

“As a turnaround, Palm faces near-term challenges,” Abramsky said. Palm lacks the “scale, marketing budgets and balance sheets” that  Research in Motion (NASDAQ:RIMM) and Apple (NASDAQ:AAPL) enjoy, he said. Nevertheless, Abramsky thinks, “The ‘New Palm’…possesses the ‘special sauce’ necessary for global smart phone leadership.” [AP]

RBC’s new FY2010 estimates for PALM is now $2.1B revenue and $0.25 non-GAAP EPS from $1.7B and $0.08.

In his report to clients Abramsky also concludes that the emergence of BlackBerry and iPhone represents the next wave of computing — “as profound as the historic technology shift from mainframes to PCs.”

According to Abramsky’s analysis, “unlike the PC revolution, which was dominated by horizontally integrated platforms like Microsoft’s (NASDAQ:MSFT) DOS and Windows, the spoils of this one are likely to go to vertically integrated smartphone makers through the “special sauce” they employ to create unique, iconic user experiences.

The most successful challengers — he singles out Research in Motion (RIMM), Apple (AAPL) and with less certainty, Palm (PALM) — could double or triple their revenues by 2012.” [Fortune]

Abramsky raised his price targets on the stocks: RIM to $150 from $100 with a 2010 EPS estimate of $4.26, from $4.16; Apple to $250 from $190 with a 2010 EPS estimate of $7.23 from $7.00; Palm to $25 from $18 with a 2011 EPS estimate of $0.75 from $0.42.

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