Did you know that Agilent Technologies (NYSE: A) is yet another play on the smartphone market?
The testing equipment expert saw first-quarter communications orders rise by 45% year-over-year, driven by its customers needing test equipment for smartphones and tablets. Demand is so strong that Agilent can't keep up with the orders, resulting in a rising backlog. The company claims to be the top-dog provider of 3G and 4G testing tools, chiefly ahead of Danaher (NYSE: DHR) and Ansys (Nasdaq: ANSS).
Agilent is particularly strong in the market for LTE testing tools, and China is a geographical hotspot for the company. In order to keep up with the rampant demand, Agilent is in the midst of building out its manufacturing facilities, thus continuing a long string of large capital expenses. You gotta spend money to make money, you know.
Mind you, Agilent is far from a pure smartphone play. The electronic measurement segment -- which aside from communications also includes general-purpose oscilloscopes, software design tools, and many other products -- accounts for about half of the company's orders and revenue. Then the company also has life sciences and chemical analysis segments.
If you want a truly pure smartphone stock, Apple or Motorola Mobility are about as close as you can get. Analog chip makers with large smartphone accounts such as TriQuint (Nasdaq: TQNT) or Skyworks Solutions (Nasdaq: SWKS) also give you a way to invest in the smartphone trend without directly picking a winner in the handset wars.
And then companies like Agilent protect you from even picking a winning chip designer. With a stock like this, you can participate in smartphone growth without really taking sides on any level, and you also have a base of medical and chemical testing tools to cushion the inevitable end of the smartphone growth era.
All things considered, Agilent beat the average analyst earnings target while falling short on the revenue line, largely because of $30 million of orders for freshly acquired Varian's products getting pushed into the second quarter.
Add Agilent to your Foolish watchlist, even if you're not interested in it as an investment. It never hurts to keep an eye on the nuts and bolts of the high-tech sector.
