Tim Cook on the stage at Apple's event. Source: Apple
Well, another great Apple (AAPL 0.87%) event is in the books. As always, the event had a few surprises. However, tucked in all the pomp and circumstance is the gritty truth: Apple's a nearly $200 billion business that can make or break suppliers and technologies. And once the dust settled, there were two "losers" from Apple's big event -- losers in the sense that they sold off yesterday. However, investors would be wise to follow these companies closely going forward.
NXP Semiconductor's sell-off
NXP Semiconductor (NXPI 2.23%) has finally been included in an iPhone iteration after Apple had shunned it seemingly forever. Apple finally decided to use the company's chips and technology in its Apple Pay platform. And that's positive for the company; although NXP has partnered with Google's Android OS via Google Wallet and Softcard -- formerly known as ISIS before changing its name in light of global events -- the technology hasn't caught on.
Fellow Fool Evan Niu calls it a "classic chicken-and egg dilemma" in regard to the technology. Essentially, no merchants want to spend money to upgrade terminals to NFC specifications, and end users won't use it if merchants won't accept it. A Catch-22 indeed.
However, Apple has the potential to change everything with its new Apple Pay platform. Unlike Google, which appears to consider its Google Wallet platform a nice but not particularly essential feature, Apple appears able to revolutionize payments using this system.
And Apple could just do that. Apple boasts over 800 million accounts, with most of those linked to a credit card. In addition, it has partnered with the three major payments networks (American Express, MasterCard, and Visa) and also with the major banks that handle 83% of the credit card volume (Wells Fargo, Bank of America, and Capital One, among others).
NXP should benefit two ways from the acceptance of this technology. First is directly through the new iPhone 6. The new phone has a chip dedicated to this technology. The second way NXP benefits is from increased merchant acceptance. It has to build out terminals to accept the technology, but for what it's worth, Apple said there are "220,000 merchant locations that accept contactless payment" and rolled out a host of merchants that are on board with the service.
This appears to be a sell-on-the-news event, with the stock trading down on the day of the announcement. The stock has soard over the past year, however, up nearly 80% during that period. However, if Apple can succeed at establishing its Apple Pay service, this could be a game changer for NXP.
GT Advanced Technologies' huge plunge
Things weren't so good for sapphire-glass maker GT Advanced Technologies (NASDAQ: GTAT). Oddly enough, the reason appears to be that Apple didn't use its technology on its iPhones but rather only on its Apple Watch. For those following the news closely, that appeared to be the consensus before the event, so perhaps these were holdouts. The stock closed down nearly 13% that day.
With that being said, Apple did use its sapphire technology in its new product, and that's incremental revenue. For all intents and purposes, the watch looks solid, and Morgan Stanley's Apple analyst, Katy Huberty, estimates the sale of between 30 million and 60 million units. If that holds true, that's a lot of units to make the display for -- and it's the part that typically comes with the highest cost of materials.
Perhaps the stock had gotten too far ahead of itself with optimism priced in. But even after the post announcement plunge, the company is still up over 100% over the past year.
Final thoughts
Apple put on an amazing show yesterday and previewed how it intends to keep that top line growing. Apple Pay and Apple Watch are new and incremental revenue drivers, and its iPhone line is a monumental step forward from the 5s and 5c iterations. I've been skeptical about Apple's valuations, but the company appears to have addressed all concerns.
As far as NXP and GT are concerned, the market didn't like what it heard yesterday. Still, if Apple is able to reinvent these product categories, look for these companies to be beneficiaries of Apple's brilliance.
