Though Apple (AAPL 1.27%) began shipping its long-awaited Apple Watch in April 2015, investors still can't seem to definitively say whether the new wearable device is a success for the massive tech company. After all, Apple still hasn't disclosed exact figures for Apple Watch revenue or unit shipments.
During Apple's latest conference call in July 2015, however, management noted that Apple Watch singlehandedly fueled a 49% increase in its "Other Products" segment, to $2.64 billion, more than offsetting the decline in iPod and accessories sales. But that's still a drop in the bucket considering Apple achieved revenue of $49.6 billion last quarter alone, while earnings came in at an incredible $10.7 billion.
While Apple Watch figures remain murky, Apple stock isn't the only way for investors to play the device. Back in June 2014, I pitched three stocks that looked poised to benefit from the device then being called the iWatch. I'm back to freshen my reasoning and check in on whether the three stocks still look like smart, Apple-related buys.
On Apple Watch's flexible display
First up is Universal Display (OLED 1.65%), which -- after initial reports argued otherwise last fall -- officially confirmed that its flagship OLED technology is incorporated into the Apple Watch's display. More specifically, Universal Display licenses its OLED patent portfolio and sells OLED materials to LG Display, which is currently the primary manufacturer of Apple Watch screens.
Apple Watch's small size means that, even if millions are sold, it won't do much to boost Universal Display's material sales volumes compared to OLED smartphones or TVs. But as I wrote when the initial deal with LG Display was reported, "Merely having Apple acknowledge ... Universal Display's flagship technology should go a long way toward convincing skeptics of its long-term viability."
Reports from earlier this year indicate Apple had tasked suppliers Innolux and Foxconn with building a massive new factory dedicated to producing flexible OLED displays for both wearable devices and a larger smartphone -- the latter of which indicates OLED could be coming to future iPhone models. In July 2015, LG Display also announced plans to invest more than $900 million in a new flexible OLED factory in Gumi, South Korea, with a target for mass production in the first half of 2017.
This confirms earlier Korean media reports to the same effect, and means the first flexible OLED iPhone could be on its way in 2018. For investors who buy Universal Display before that happens, the financial rewards could be great.
On Apple Watch's motion sensors
Next, what's an Apple Watch without cutting-edge motion sensors? That's where motion chip specialist InvenSense (INVN) comes into play.
Curiously, though, InvenSense didn't win a spot in the first-generation Apple Watch. Instead, Apple gave the motion sensor nod to competitor ST Microelectronics -- a particularly puzzling move considering InvenSense CEO Behrooz Abdi stated in a January interview with the Fool that his company's products had a place in 100% of smartwatches available at the time.
During InvenSense's first-quarter conference call in April, however, Abdi elaborated that Apple's decision "wasn't anything technology-related." Rather, Abdi says Apple didn't require the superior energy efficiency -- and, consequently, higher price -- of InvenSense's chips. This is encouraging in that it indicates InvenSense's position as a technical leader in the motion sensor space remains intact, and that it wasn't willing to sacrifice the margins required to win a spot with a chip that provided more than Apple needed.
In addition, keeping in mind InvenSense still plays a central role in Apple's massively popular iPhone 6, investors should also note that Apple regularly changes its list of suppliers for any given product iteration. If the next version of Apple Watch requires better specs at a reasonable price, you can be sure InvenSense will be willing to step up to the plate.
On the Apple Watch's protective cover
Finally, consider high-tech glass specialist Corning (GLW -0.03%) as a play on Apple Watch's durable glass display cover.
I'm aware that two of the three Apple Watch Models -- the standard "Watch" and "Watch Edition" versions -- currently boast highly scratch-resistant sapphire crystal covers. Corning doesn't currently produce sapphire, which it argues doesn't fare as well as its own Gorilla Glass when dropped.
What's more, given the fact that Gorilla Glass has long served as the protective cover of choice for Apple's iPhones, it's highly likely Corning is the company behind the "strengthened Ion-X glass" featured on the Apple Watch "Sport" model. That also happens to be the least expensive of the three models, so is most likely to sell in the highest volumes.
If that's not enough, Corning management recently told investors they will soon commercialize a new product with the same damage resistance as Gorilla Glass, but with scratch resistance "approaching sapphire." As a result, I won't be the least bit surprised if Corning eventually wins a spot in all three Apple Watch models, while continuing to protect Apple's massively popular iPhones. If that happens, patient Corning investors will be happy they held onto their shares.
