5 Winners of Apple's New iPhone

There was no shortage of hero worship yesterday, as Apple's (Nasdaq: AAPL  ) Steve Jobs introduced the slick new iPhone 4 in his keynote address at the company's Worldwide Developer Conference.

Jobs' presentation also included a few surprise guests, all explaining how Apple is lending a hand to their own goals. Let's go over a few of the companies that stand to benefit the most from wide acceptance of the fourth-generation iPhone.

Apple (obviously)
iPhone 4 is a more significant upgrade than the first two revisions to Apple's breakthrough smartphone. However, there's another reason why the iPhone 4 will outsell even last year's popular 3GS this summer. In a surprising move, AT&T (NYSE: T  ) is allowing anyone whose iPhone two-year contract is set to expire later this year to upgrade without an early termination penalty.

The option to shave as much as six months off current contracts naturally leaves cynics suspicious. Is AT&T just trying to wean more data hogs off its unlimited data plans? Is the iPhone's exclusivity about to come to an end, leaving AT&T scrambling to corral as many existing owners as possible into new two-year deals? Either way, the hubbub won't matter for Apple. It simply means that the company going to sell a lot more iPhones than it otherwise would during its June 24 launch.

AT&T
I'm no fan of AT&T's decision to stop offering data-plan smorgasbords to new iPhone buyers. But as long as Ma Bell remains the exclusive iPhone carrier domestically, it stands to gain plenty, because the iPhone user base grows with every generation.  

Microsoft (Nasdaq: MSFT  )
What's good for Apple is rarely good for Microsoft, yet there was a point during yesterday's presentation when Jobs called Bing "kinda cool," announcing that Microsoft's spunky search engine will be added as a default choice for queries. "Microsoft's done a great job on this," Jobs also said. When the sultan of style speaks, people listen. Jobs just gave Bing its heartiest endorsement to date.

Netflix (Nasdaq: NFLX  )
One of the surprise presenters yesterday was Netflix CEO Reed Hastings. He hasn't always been an Apple ally. Netflix offered online streaming on PCs long before it was available on Macs, and Hastings also sits on Microsoft's board of directors. None of this stopped him from announcing that an iPhone streaming app -- providing access to Netflix's growing digital catalog to unlimited-plan subscribers, at no additional cost -- will be out this summer. Taking advantage of adaptive bitrate technology, the streams will be able to continue at a lower resolution if speedy Wi-Fi connections get shunted to slower 3G pipelines. That technology will probably mean lower bandwidth costs for Netflix, too.

Activision Blizzard (Nasdaq: ATVI  )
The country's leading video game developer hasn't been a force in the App Store ecosystem, but that's about to change, now that Guitar Hero is coming to the iPhone and iPod touch. Yes, the gaming giant is late to the game. There are already several rhythmic tapping games available, and the franchise itself is past its prime. But this version's supposed to come with a new strumming move. If there's a future in low-priced gaming apps backed by online advertising, Activision Blizzard needs to make a dent in this niche, and Guitar Hero gone mobile is a good start.

In short, Apple's summer is looking mighty fine.

Are there any other winners behind Apple's new iPhone? Share your thoughts in the comment box below.

Microsoft is a Motley Fool Inside Value recommendation. Apple, Activision Blizzard, and Netflix are all Stock Advisor picks. Motley Fool Options has recommended a synthetic long position on Activision Blizzard and a diagonal call position on Microsoft. The Fool owns shares of Activision Blizzard. Try any of our Foolish newsletters today, free for 30 days.

Longtime Fool contributor Rick Munarriz is starting to see more Apple products creep into his home lately. He owns shares of Netflix, but nothing of any of the other companies in this story. He is also part of the Rule Breakers newsletter research team, seeking out tomorrow's ultimate growth stocks a day early. The Fool has a disclosure policy.


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  • Report this Comment On June 08, 2010, at 12:31 PM, Linksmanrjf wrote:

    Was Job's announcement timed to counter Sprint's introduction of it's G4 device?

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