By Philip Elmer-DeWitt
October 10, 2012

FORTUNE — “We said the new iPhone was going to be huge and it was,” writes Pacific Crest’s James Faucette in a note to clients issued Tuesday. He briefly touches on Apple (AAPL)  — noting strong demand for both the new phone and the newly discounted older models — before unloading a trunkful of bad news for Google’s (GOOG) Android:

  • “Android as a whole likely takes September on the chin.” Faucette writes that he’s seeing several Android-based vendors aggressively discounted previously “high-end” flagship-type products to mid- and low-tier pricing. “While the [Samsung] Galaxy SIII will continue to generate positive news flow as a viable iPhone competitor,” he writes, “we continue to believe that as an ecosystem, Android’s shipment levels likely peaked in the U.S. as far back as last October and are likely to see further declines in the future if the retention gap doesn’t close.” That’s a reference to an Oct. 5 survey that found 54% of U.S. consumers intend to buy an iOS product in the coming 12 months versus 37% for Android.
  • “Galaxy SIII … inventories are rising faster than sales.” He believes sell-through rates for the Galaxy SIII have been declining steadily over the past few months once the initial pent-up demand was filled. He estimates that Samsung shipped about 17 million SIII units during the September quarter and sold through about 10 million, leaving roughly six weeks of channel inventory.
  • “HTC disappointment likely to continue.” His checks suggest that aggressive discounting led to some “modest improvement” for HTC’s smartphone sales in September. But HTC went into September with a lot of inventory on store shelves, which probably explains the downtick in shipments that the company reported on Monday.

If it’s any comfort, Faucette thinks prospects may be even worse for Research in Motion (RIMM). “Western Europe is full of BlackBerries,” he writes. And as for the U.S.: “We believe BlackBerry’s relevance in carriers retail locations continues to decline with each passing month.”

You May Like