UBS’s Maynard Um this afternoon offers up a longish (17 pages) update on the outlook for the handset industry, writing that there’s an increasing divergence between the “strong warriors,” namely Apple (AAPL) and Samsung Electronics (SSNLF), on the one hand, and the weaker forces, including some who are trying to make a buck off Google’s (GOOG) Android software but who are not Samsung.
Um cut his 2012 handset volume forecast to 1.69 billion units from a prior $1.702 billion, as basic phones, many of them what you’d call “feature phones,” break down. But he sees that lower overall volume producing higher industry revenue, and $242.8 billion versus his prior $238.77 billion estimate.
Phones using faster 4G connections based on the “LTE” standard will ship about 40 million units, or 7% of the total smartphone market this year, he estimates, rising to 120 million, or 15%, in 2013.
Perhaps more important, Um is raising his pre-tax (EBIT) profit estimate for this year, to $42 billion from a prior $35.16 billion, mainly because of an even stronger outlook for Apple and Samsung.
Um expounds upon that disparity:
Smartphones continue to grow strongly, now accounting for over 30% of total volumes and over 75% of total industry revenues. However, the performance disparity between the stronger players � Apple and Samsung � vs. the others remains stark and these two now account for over 55% of industry revenues and over 90% of total EBIT. Our checks show most industry participants expect smartphone growth of 30-35% in 2012 after our estimated 59% in 2011. We remain more positive and forecast 40% growth in 2012 but increasingly driven by midrange/entry smartphones and expect the growth for the lower priced segment to overtake the very high-end.
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