Who Will Be in the iPhone 5?

Mark your calendars for Oct. 4.

AllThingsD reports that Apple (Nasdaq: AAPL  ) is expected to unveil the better-late-than-never iPhone 5 on that fateful Tuesday during an event hosted by CEO Tim Cook. This year, Cupertino has departed from its tradition of announcing the latest and greatest model each summer, although the company had a minor debut in January, when it broke its monogamy with AT&T and let Verizon in on the action.

What can we expect to see in the iPhone 5? Let's start by looking at some significant components found in the current iPhone 4 and go from there.

  • Skyworks (Nasdaq: SWKS  ) and TriQuint power amplifier module.
  • Broadcom Wi-Fi, Bluetooth, and GPS chips.
  • Samsung flash memory, DRAM memory, and manufactured ARM-based A4 chip designed by Apple.
  • Cirrus Logic (Nasdaq: CRUS  ) audio codec.
  • Texas Instruments touchscreen microcontroller.
  • OmniVision (Nasdaq: OVTI  ) rear-facing 5 MP backside illuminated CMOS image sensor and front-facing VGA camera.
  • STMicroelectronics 3-axis accelerometer and 3-axis gyroscope.
  • Intel-owned Infineon supplies the baseband for the AT&T model for its GSM network.
  • Qualcomm (Nasdaq: QCOM  ) world-mode baseband in the Verizon version that supports both GSM and CDMA networks like Verizon's.
  • Corning (NYSE: GLW  ) Gorilla Glass.

This isn't a comprehensive list, but it's a good starting point to speculate on who will win spots in the iPhone 5. Some of the suppliers are unlikely to change, while others are almost certain to. Samsung still fabricates the A5 chip found in the iPad 2, so it's practically a sure bet to do the heavy lifting. Taiwan Semiconductor Manufacturing is rumored to manufacture the next two generations, the A6 and A7.

Say "Cheese"!
OmniVision bears have contended that the iPhone 5's camera will be dual-sourced, with Sony sharing the spot. I've owned and followed OmniVision for quite a while, and these rumors pop up every few months, and the company gets punished hard each and every time. The latest selloff provided enough of a discount for one Fool to pick up shares for himself.

The company's second-generation BSI sensor was unveiled earlier this year and scheduled for mass production during the second half of the year. I've actually thought one possible reason for a late iPhone this year was specifically to be able to include these next-generation sensors.

We all know that Apple is a perfectionist of a company, and the dual-sourcing hypothesis opens up the potential for inconsistent user experiences among the models if the sensors perform differently. The iPhone 4 camera solely provided by OmniVision has gotten loads of praise. Why mess with a good thing? My official prediction is that in spite of weak guidance scaring investors off, OmniVision will be the sole supplier of an 8 MP BSI-2 rear-facing sensor.

One for all
The inclusion of Qualcomm's world-mode baseband in the Verizon iPhone 4 is notable because it was one instance where Apple may have revealed its hand early, if you don't count losing prototypes in bars. Right now, iPhone 4 comes in two flavors: CDMA (Verizon) and GSM (AT&T).

Chances are that an updated dual-mode baseband chip will be in one single iPhone 5 model and will be able to run on any 3G network you throw at it, displacing Infineon. The unified chip would eliminate the need for two separate models and the associated manufacturing inefficiencies. By coming out mid-product cycle, the Verizon iPhone gave us a glimpse of what Apple may be thinking as the iPhone evolves.

New and improved
When it comes to totally new features beyond incremental spec bumps, there are two possibilities that stand out in my mind: 4G LTE and near field communications, or NFC.

AT&T and Verizon have been aggressively building out their 4G LTE networks, but they still remain inchoate in the grand scheme of things. Right now, AT&T's 4G LTE covers only five cities and is aiming for 15 by year's end, while Verizon boasts 143 markets with a goal of 175 throughout 2011. Add in the fact that 4G technology is so young and that its speed comes at the expense of battery life -- which Apple puts high on the priority list -- and the prospects of seeing 4G in this year's iPhone start to dwindle. Of course it's possible, but I think this one will have to wait until the iPhone 6, when LTE has better coverage and technology.

When it comes to NFC, it also lacks any meaningful infrastructure, just like 4G. Google just launched its Google Wallet service, which uses NFC, while eBay's PayPal chose a different route to get physical. Adding the technology would be a boon for NFC chipmaker NXP Semiconductors (Nasdaq: NXPI  ) , but there's really no rush to include it, since most merchants and payment processors haven't fully adopted it.

A broken crystal ball
I have no way to predict the future. These are merely some of my educated guesses. This year's iPhone 5 will certainly see some basic specification upgrades and maybe even a redesigned case with a larger 4-inch screen. Of the two new features mentioned, I think only NFC would make it, if at all. We'll know for sure once it's released and subsequently torn asunder.

Apple also has a penchant for throwing us a curve ball occasionally and catching us off guard with features we didn't even know we wanted, so there's always the chance that Cupertino will do something no one expected.

What do you think? How will Apple improve the iPhone? Share your thoughts in the comments box below.

Fool contributor Evan Niu owns shares of AT&T, OmniVision Technologies, and Apple, but he holds no other position in any company mentioned. Check out his holdings and a short bio. The Motley Fool owns shares of Apple, Qualcomm, Texas Instruments, Intel, Cirrus Logic, and Google and has bought calls on Intel. Motley Fool newsletter services have recommended buying shares of NXP Semiconductors, Intel, Apple, Corning, eBay, Google, and AT&T, creating a diagonal call position in Intel, and creating a bull call spread position in Apple. Try any of our Foolish newsletter services free for 30 days. We Fools don't all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

Read/Post Comments (7) | Recommend This Article (9)

Comments from our Foolish Readers

Help us keep this a respectfully Foolish area! This is a place for our readers to discuss, debate, and learn more about the Foolish investing topic you read about above. Help us keep it clean and safe. If you believe a comment is abusive or otherwise violates our Fool's Rules, please report it via the Report this Comment Report this Comment icon found on every comment.

  • Report this Comment On September 22, 2011, at 11:15 PM, scotinus wrote:

    If you're right and the I-Phone5 does not have LTE, then it is dead in the water. The Motorola Droid Bionic is rocking my world right now. I've run 4 LTE speed tests over the last 2 weeks and they have ranged from 8Mbps - 28Mbps. Phenomenal! On several occasions I've swapped out of WiFi to LTE cause the 802.11 was not up to the job. OK, sure, with a 1GHz uP and LTE on fire, there's bound to be a hit on battery. But it's perfectly manageable and nothing anyone else can solve right now without reducing the speed. I'll take the speed.

  • Report this Comment On September 23, 2011, at 12:01 AM, DoctorLewis4 wrote:

    Got rid of my Droid phone. It was terrible. Will be in line for new iPhone.

  • Report this Comment On September 23, 2011, at 6:18 AM, stocks3066 wrote:

    I believe you missed RF Micro Devices of your vendor list. You can tell by it's recent movement that it has a new contract with Apple.

  • Report this Comment On September 23, 2011, at 8:01 AM, fool1977 wrote:

    scotinus, I think you would be correct if 4G/LTE were prevalent, but it's not. It's still only available to a small number of people and of those, only a subset really need the extra speed on a day to day basis. This is the same argument that was made when the iphone 2 came out without 3G, and those ended up selling just fine. A large number of my (mostly techie) friends including myself are lined up and waiting to replace our busted up 3g, 3gs and 4. LTE is not a deal breaker for any of us.

  • Report this Comment On September 23, 2011, at 8:27 AM, TMFRhino wrote:

    Just to point out, that list was companies currently in the iPhone 4 and was a jumping off point for examining the insides of the iPhone. Evan wasn't trying to say all those companies will have wins in the new iPhone.

    For example, the RF space is pretty rife with speculation that Avago picked up some space, TriQuint might have lost some, and Skyworks could even be out of the phone.


  • Report this Comment On September 26, 2011, at 8:26 AM, Hogger15 wrote:

    A few points:

    1) it's true that the list includes suppliers for the iPhone4, but that's the best guess for now.

    2) there is a lot of speculation about whether or not the iPhone5 will have RF capability. Company stock movement does not necessarily jibe with reality. Look at the recent unfair plunges of OVTI and ZOLL.

    3) all indications are that the iPhone5 will not have 4G capability. Verizon's 4G LTE is awesome, but you also are restricted by their data plan.

    4) I hope that the author was wrong when he said that the camera will be the 5MP OVTI camera. This means that it's the same camera that OVTI put into the iPhone4. OVTI has an industry-leading 8MP camera. Wouldn't that be a better guess? Without an 8MP and 4G capability, this means that the only thing better about the iPhone5 than the iPhone4 will be its processor (and maybe some minor changes to the body). That would be a death blow to its sales.

  • Report this Comment On September 27, 2011, at 6:29 PM, TMFNewCow wrote:

    @Hogger15, just wanted to point out the 5 MP was only mentioned as the current sensor.

    "My official prediction is that in spite of weak guidance scaring investors off, OmniVision will be the sole supplier of an 8 MP BSI-2 rear-facing sensor."

    I'm sort of preparing myself to expect the unexpected next week, but then again with all the leaks/rumors nowadays, we usually get a decent picture of what to expect.

    -- Evan

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