Marquis Investment Research’s Greg Gorbantenko thinks that Samsung’s handset weakness in 3Q 2004 might mean good news for Motorola.
Samsung’s handset numbers were relatively weak. After posting a sequential volume gain of ~ 3M units in 2Q, this last quarter’s flatness was quite disappointing for them. On the flip side, it may bode well for MOT (reports Tuesday 10/19 PM) when coupled with NOK’s 3Q results. While NOK had good sequential growth of 5M handsets, they believe the industry garnered 10M extra. Since Samsung the #3 player received zero sequential growth, that means that chances are good that MOT held its position and may even have increased it a little sequentially. We believe most of the Street is going to be around 25M shipped for MOT in 3Q, we think it could be north of this. If ASP stays static like it did last Q, MOT could be looking pretty tomorrow night. Our deductive reasoning may prove profitable like it did in the last two quarters.
My suspicion is that in the 3Q Samsung did not introduce any killer handsets, and as a result was essentially flat in terms of gaining market share. The 4Q however could be a whole different story. Still I agree, a near term pop in Motorola is on cards.