Apple (Nasdaq:AAPL), Cisco (Nasdaq:CSCO), Cogo (Nasdaq:COGO) Favorites of Ticonderoga

Ticonderoga gave their outlook for the Networking & IT Hardware, noting Apple (Nasdaq:AAPL), Cisco (Nasdaq:CSCO) and Cogo (Nasdaq:COGO) were their favorites in certain segments.

Ticonderoga said, "Slower Tech Growth in 2011 Will Drive Focus on Secular Trends. Our sixteen tech universe experienced an average stock gain of 21% in 2010, but we don't expect returns will be as easy in 2011. After a sharp rebound last year, we expect slower revenue growth in the tech world in 2011, and the margin expansion story is starting to show its age. Despite slower growth and the risk of reoccurring macro concerns, there are several secular trends that should provide a favorable backdrop for certain tech players.

Apple Is Our Top Pick, Cisco as a Turnaround and Cogo in Small-Cap. Our overall top pick for 2011 is Apple (Buy), as we believe the company's product portfolio remains the best positioned to capitalize on the secular trends in the consumer electronics market, which includes the ramp of the mobile Internet around the world. We believe the iPad will take on a life of its own in 2011 and users will increasingly flock to Mac products, while we expect the iPhone will continue to gain momentum around the world and begin to tap into CDMA networks with carriers such as Verizon and China Telecom. Cisco (Buy) is our favorite turnaround story for investors who can weather the potential for choppy waters in the near term, while our favorite small-cap pick for 2011 is China-based Cogo Group (Buy)."

Apple was trading at $329.39, up $6.83, or 2.12 percent, as of 12:39 PM EST. Cisco was trading at $20.58, up $0.35, or 1.75 percent. Cogo was at $8.92, up $0.07, or 0.79 percent.

China Telecom (NYSE:CHA), China Unicom (NYSE:CHU) and Apple (Nasdaq:AAPL) iPhone

Continuing to comment on their China tech tour, Ticonderoga Securities focuses on the prospects for China Telecom (NYSE:CHA) and China Unicom (NYSE:CHU), along with the future of the Apple (Nasdaq:AAPL) iPhone with them.

Ticonderoga said, "When Will China Telecom Have the iPhone? Our meeting with China Telecom highlighted the carrier's ambition to grow into the largest CDMA wireless carrier in the world next year, and we believe the company is well positioned to begin offering the Apple (Buy) iPhone in 2011. The company sounded optimistic around a recent low-cost mobile phone initiative that promoted mobile phones from ZTE d Huawei that were sold out in just 2-3 weeks. We continue to view Cogo (Nasdaq:COGO)(Buy) and Apple as attractive ways to play the Mobile Internet ramp in China.

"Long Wait for the iPhone 4 at China Unicom. Our meeting with China Unicom (NR) highlighted stronger than expected demand for the iPhone 4 that has resulted in the company's inability to fulfill approximately one-third of pre-orders. We estimate up to a 2-month wait period for the iPhone 4 in China with China Unicom, and orders have accelerated since October, while sales of the iPad are imminent, in our view.

"We Are Noticing an iPhone 4 Shortage in China. During our visits to Apple reseller stores in China over the past few days, we heard about shortages of the iPhone 4, 11-inch MacBook Air and certain versions of the iPad. The iPhone 4 is clearly the most difficult to purchase, with wait times hovering around 2 months. Most of the carriers agree that the high-end smartphone opportunity in China is approximately 100-125 million subscribers, which we view as the addressable market for the iPhone."

China Telecom closed Tuesday at $50.88, up by $0.28, or 0.55 percent. China Unicom ended the session at $13.82, up $0.29, or 2.14 percent.

Ticonderoga on Cogo (Nasdaq:COGO), Huawei

Fresh off their first day at the China Tech Investor Tour, Ticonderoga Securities came away with their take on Cogo (Nasdaq:COGO) and Huawei.

Ticonderoga said, "Cogo Still in Ramp Mode, We See More Upside Potential. After our Cogo (Buy-rated) meeting, we remain confident in the growth path at the company and believe our estimates for 2011 remain very conservative. With the momentum we see at Cogo, we would not be surprised if the company is able to reach $1 billion in revenue over the next few years. After today's meetings, we believe the company is well positioned to benefit from the continued investment in telecom infrastructure, combined with the ramp of China's mobile Internet, which remains in the early stages of development and ultimately will shift from 3G to 4G networks. Additionally, we remain intrigued by the ramp of new tablet customers, and the industrial business continues to have momentum into 2011.

"Huawei Sticks Its Head Into the Clouds; ZTE Handsets Rebound. Our meeting with Huawei highlighted the company's evolution from a telecom equipment vendor to a broader IT vendor with an aggressive cloud computing ramp. As such, we would not be surprised if the company is able to double its business in areas such as Ethernet switch and computing-related (e.g., storage, server) in 2011. Cisco (Nasdaq:CSCO)(Buy-rated) appears to be the target for Huawei in the near term and HP (NYSE:HPQ)(NR) over the longer term, while the company also plans to be a player in the cloud services market. On the supplier front, we sensed Huawei is positioned to ramp Altera (Nasdaq:ALTR)(NR) at a much faster pace than Xilinx (Nasdaq:XLNX)(NR) in 2011. During our ZTE meeting, we felt the company is satisfied with a strong ramp for the India 3G market and expects this to represent the fastest growth area in 2011. Also, the PTN business is expected to continue to enjoy strong growth in 2011, while we believe the handset business will enjoy a significant uptick in 4Q10 and terminals could top 100 million in 2011."

Cogo closed Monday at $7.73, up by $0.13, or 1.71 percent.