As Apple Inc. (NASDAQ:AAPL) prepares to show off its next major product refreshes tomorrow, the smartphone industry as a whole is facing typical August seasonal slowness. However, in spite of the seasonal slowness, it’s becoming clear that even during the industry’s slow period, sales of Nokia Corporation (NYSE:NOK) (BIT:NOK1V) (HEL:NOK1V)’s Windows Phones are gradually improving, while BlackBerry Ltd (NASDAQ:BBRY) (TSE:BB) sales continue to be exceptionally soft.

Smartphones

Consumers looking ahead

Canaccord Genuity analysts issued a report to investors explaining the bigger picture of the smartphone industry at the end of August. Analysts T. Michael Walkley, Matthew D. Ramsay and Siddharth Sinha said their checks of U.S. wireless stores indicate “normally seasonally softer smartphone sales during August.” They say the slowness is largely due to consumers looking forward to the holiday shopping season and the fall launches of new high-tier products from Apple and other companies.

As a result, they expect to see strong sales from Apple Inc. (NASDAQ:AAPL) and other high-end smartphone makers during the holiday quarter. They said the better than expected guidance from QUALCOMM, Inc. (NASDAQ:QCOM), Arm Holdings plc (NASDAQ:ARMH) (LON:ARM) and other top RFIC suppliers supports their projection of a strong holiday quarter for Apple, Samsung Electronics Co., Ltd. (LON:BC94) (KRX:005930) and other smartphone makers.

Apple continues to fight with Samsung for U.S. market

The analysts said their checks suggest Samsung and Apple Inc. (NASDAQ:AAPL) continue to be the top two smartphone makers in the U.S. They found that Samsung’s Galaxy S4 was the best-selling smartphone at Verizon, Sprint and T-Mobile and the second best-selling smartphone at AT&T. They said the iPhone 5 was the best seller at AT&T and did well at the other carriers as well, even though it trailed the Galaxy S4.

They said the reason the iPhone 5 fell behind the Galaxy S4 is because consumers are looking forward to the new iPhones which are expected to be unveiled tomorrow. They said their surveys during August suggested “growing store representative and consumer interest in and awareness for the upcoming iPhone refreshes.” They also said their global checks indicate that sales of Apple Inc. (NASDAQ:AAPL)’s less expensive iPhone 4S and iPhone 4 continue to be steady around the globe.

Demand for Apple’s iPhone 5C appears strong

The Canaccord Genuity analysts said Apple’s September quarter guidance is consistent with their expectations for launches of the iPhone 5S and 5C this month as being offset by channel inventory reductions of the iPhone 5, 4S and 4. They believe that continued sales of Apple Inc. (NASDAQ:AAPL)’s lower cost handsets suggests strong demand for the iPhone 5C, depending on the pricing strategy the company chooses. They also said strong sales of refurbished handsets in emerging markets suggest demand for the lower priced iPhone 5C will be strong.

The analysts believe Apple Inc. (NASDAQ:AAPL) will return to earnings growth during the company’s fiscal year 2014 based on product refreshes for the iPhone and iPad. They have reiterated their Buy rating and $530 per share price target for Apple.

Nokia’s Windows Phones going strong

The analyst team also noted that sales of Nokia Corporation (NYSE:NOK) (BIT:NOK1V) (HEL:NOK1V)’s phones are steadily improving ahead of the expected acquisition of the company’s devices division by Microsoft Corporation (NASDAQ:MSFT). Their checks indicate “positive reviews and decent Lumia 1020 sales at AT&T.”

They said sales of the entry-level Lumia 520 and Nokia Corporation (NYSE:NOK) (BIT:NOK1V) (HEL:NOK1V)’s other low to mid-tier are driving steadily improving Windows Phone 8 smartphone market share globally. Their checks showed positive reviews and models sales of the Lumia 521 and Lumia 925 at T-Mobile. In fact, they note that the Lumia 520 is not just selling well in emerging markets like Russia and the Asia Pacific region but also in developed markets like the U.S. and U.K.

This could be consistent with a trend noted by Kantar—that Nokia appears to be taking a decent chunk of users who are upgrading from feature phones to smartphones for the first time.

Low and mid-tier Lumias pushing Windows Phone share

The analysts believe that growing Lumia sales in the mid to low-tier smartphone segments are gradually pushing the Windows Phone 8 market share higher. They estimate that sales of Nokia’s Lumia handsets are now more than 85 percent of all Windows Phone sales, which would be consistent with Microsoft Corporation (NASDAQ:MSFT)’s statement that Nokia now makes up more than 80 percent of Windows Phone sales.

Microsoft and Nokia Corporation (NYSE:NOK) (BIT:NOK1V) (HEL:NOK1V) estimate that Windows Phones now hold a greater market share than BlackBerry Ltd (NASDAQ:BBRY) (TSE:BB) in 34 different markets around the globe. That includes key markets like China, Russia Brazil and the U.S.

They maintained their Hold rating and $5.50 per share price target on Nokia shares.

BlackBerry sales still slumping

The Canaccord Genuity analysts said their August store checks indicate that sales of BlackBerry Ltd (NASDAQ:BBRY) (TSE:BB)’s Z10 and Q10 continue to be “very soft” at Verizon, AT&T and T-Mobile. They said many of the representatives they spoke with had “minimal interest in and sales of the Q10.”

They were surprised by how weak sales for the Q10 are because of the company’s installed base of QWERTY keyboard handset users. In fact, it appeared to them as if the lack of consumer interest in the handset has “considerably weakened over the past few weeks.”

More bad news for BlackBerry

Their surveys also indicated weak sales of the less expensive Q5 handset and rapidly declining BlackBerry 7 sales since the launch of BlackBerry 10 and also since the company announced it would support BlackBerry Messenger on competing smartphone platforms. They’re predicting that BlackBerry 7 sales will decline even more sharply—especially in emerging markets—now that Android and iOS are going to support BlackBerry Messenger. They believe that smartphone users in emerging markets will upgrade their BlackBerry 7 devices with a low-end Android device.

The analysts also said their conversations with distributors suggest that there are very high channel inventory levels of BlackBerry 10 devices even though average selling prices of the handsets are falling. They maintained their Sell rating and $8 per share price target on BlackBerry shares.