QCOM, INVN: Evercore Starts at Buy; Hold on RIM, NOK

Mark McKechnie, formerly with ThinkEquity, has re-emerged at Evercore Partners and this afternoon initiated coverage of four telecom-related stocks: Qualcomm (QCOM), Research in Motion (RIMM), Nokia (NOK), and motion-sensing technology vendor InvenSense (INVN).

McKechnie rates Qualcomm and InvenSense shares Overweight, with price targets of $85 and $20, respectively. He started RIM and Nokia shares at Equal Weight, with $8 and $3 price targets, respectively.

Aside from “near-term catalysts” such as the introduction of Apple‘s (AAPL) next iPhone this fall, he speculates, and improved yield of chips generally at the smallest feature sizes (28 nanometers), McKechnie sees Qualcomm possibly getting a boost with the spreading of wireless chipsets to PCs and tablet computers:

4G will drive higher 3G/4G penetration into PCs and tablets. We think a combination of better 4G performance, improved service plans, and new WinRT notebooks will drive higher demand for mobile 3G/4G connectivity. Will we monitor the deployment of 4G small cells as a key longer-term enabler for network traffic growth and thus tablet adoption. For reference, every 10M of incremental 3G/4G notebook/tablet sales could add ~ a nickel in royalty EPS and another nickel if it uses QCOM chips.

McKechnie also thinks Qualcomm’s profit margins in its chipset business will return to levels in the low 20s on a percent basis next year as the company reaches a more stable ramp in those 28-nanometer chips, and as it achieves “tiering” of smartphones at lower prices in developing markets.

McKechnie likes InvenSense’s “proprietary advantage” in the market for motion sensing, writing that he anticipates “an estimated 62% and 40% CY12 and CY13 unit growth forecast for the motion sensor market driven by increased attach rates to smart phones and tablets.”

Specifically, “We see the attach rate of motion sensors growing from about 45% of an 800M smart phone and tablet market in 2012, to 70% of a 1.7B smart phone and tablet market by 2015.”

McKechnie views RIM’s future as “deteriorating fundamentals and an increased cash burn, with potential takeout value for RIMM�s IP,” adding, “We see the outcome as fairly binary.”

McKechnie thinks the company’s 78 million subscribers could eventually shrink to a steady state of 30 million “die hard” users willing to pay $3 per month.

In the meantime, the services business is one of the more valuable assets the company has, but the “clock is ticking” as “independent Mobile Device Management (�MDM�) players such as Airwatch, Mobile Iron, Good, or others serve the BYOD market with secure smart phone and tablet management systems.”

Nokia is worth $3 based on a “sum of the parts” analysis, he thinks, consisting of $1.10 per share in patent value, 35 cents a share for its Nokia-Siemens Networks unit, 70 cents a share for the location business, and 7o cents a share in net cash, based on his 2013 projections.

As for the partnership with Microsoft (MSFT), McKechnie is not optimistic:

“We view NOK�s commitment to Windows Phone (�WP�) as problematic in the face of the accelerating iOS and Android ecosystems. We note that even if WP finds traction from carriers (i.e. VZ) to keep Apple and Android in check, NOK will have to compete with other ecosystem OEMs and face limited share and single digit margins.