Monday, October 02, 2006

Calls of Note Part 4

- Piper Jaffray is positive on Smith Micro (NASDAQ:SMSI) saying that based on their monthly handset channel check, they believe Verizon continued to push sales of music enabled handsets due to the recent launch of music-enabled Motorola KRZR, Nokia 6315i, continued sales strength of LG's Chocolate phone, and a price cut for the Samsung A930. With the increasing number of music phones, they believe this trend bodes well for sales of Smith Micro's Music Essential Kits ("MEKs").

While it was clear Verizon store managers were still strongly promoting its V CAST music service and enjoying strong sales of music-enabled handsets such as the LG Chocolate phone and the LG VX 8300, firm's checks also indicated store sales people were more proactively educating customers about MEKs during September. They believe sales of Smith Micro MEKs posted stronger sales during the September quarter.

Reits Outpeform and $18 tgt.

Notablecalls: Not actionable but good to know category.

- Piper Jaffray comments also on Motorola (NYSE:MOT) saying their checks indicated strong North American trends. With new products launching, they believe Motorola is well-positioned to grow its dominant share during Q406. Global checks also indicate solid trends for Motorola. FIrm believes Q406 estimates could prove conservative and maintain Outperform rating.

While firm's checks noted increasing competition from Samsung and LG, they believe Motorola maintained its dominant market share in North America. Further, with Sprint introducing new thin Motorola products such as the Q, KRZR, and RAZR during Q406 combined with the launch of several new Motorola products for the leading North American carriers this holiday season, they believe Motorola should maintain and may even grow its dominant North American market share during Q406.

Due to channel checks and increasing confidence in Motorola continuing to gain global market, the firm believes Motorola is well-positioned for the seasonally strong holiday season and their Q406 estimates could prove conservative.

Maintains Outperform and $27 tgt.

Notablecalls: Not actionable but good to know category.

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