Whenever a new Apple (Nasdaq: AAPL ) device gets into consumers' hands, the main attraction for chip investors isn't the phone itself, but the chance to rip the phone apart and see which chip companies made the cut.
With iPhone sales set to explode over the holiday season and researcher IHS reporting that Apple will buy $28 billion worth of semiconductors this year (well ahead of No. 2 Samsung), getting into Apple products is extremely important for a number of companies. Let's take a look at some companies appearing in today's morning teardowns.
Let's check on the winners
Skyworks (Nasdaq: SWKS ) tumbled 18% yesterday for, ahem, hitting the top end of its guidance, which stoked fears that it could be losing content in the iPhone 5 or, possibly, that optimism over the size of the company's iPhone sales ramp had gotten out of hand.
The radio frequency, or RF, space can see shifts between suppliers, but Skyworks once again has some nice content in the iPhone. Chipworks notes that the company has a GSM power amp, a CDMA power amp, and some WiFi front-end components to go along with Broadcom's (Nasdaq: BRCM ) WiFI chip.
Avago (Nasdaq: AVGO ) keeps a strong presence in the phone with its 7813 CDMA/AMPS power amplifier while also scoring the LTE power amp spot. Meanwhile, TriQuint (Nasdaq: TQNT ) , a longtime fixture inside Apple products, finds itself in the iPhone once again with a WCDMA/HSUPA power amp/duplexer module.
Pretty much as expected
Among RF plays, the big addition this year was LTE support, with Avago providing the power amp. The stock has risen 5% in early trading in reaction to the company's iPhone wins. Likewise, we see TriQuint up 3.3% and Skyworks up 5.4%. The caveat to Skyworks' gains is that the company was down 18% yesterday, so verification of the company's iPhone wins still leaves it well below where it opened the week. In the case of TriQuint, while it maintains an iPhone presence, the company is expected to see a revenue drop-off of 3% this quarter and 7% the next.
There might be optimism around iPhone RF suppliers today, but a place in the iPhone is contrasted against continuing price competition in the space, as well as weakness in adjacent markets like telecom equipment and military spending. Investors would be wise to keep their optimism in check when looking at the space.
If you're an investor in either Apple or the chip companies scoring design wins in its product, there's no shortage of areas to be watching in the months ahead. Chatter continues about an Apple TV, and very soon the next iPhone and an iPad Mini are likely to be revealed. To help investors track all the threats and opportunities facing the company, we've created a brand-new report on Apple. It not only details reasons to buy and sell the company, but it also comes with continuing guidance and updates in the influential months ahead. Not only that, but you get plenty of extras, like our brand-new report on which iPhone suppliers are set to gain the most from the iPhone 5 launch. Click here to get started now.