When Nexus 4 was announced, Google made an unprecedented move that is sure to shake up carriers and competitors. Selling for $299 without a contract (8GB model) and $349 for the 16GB model, the Nexus 4 could be a runaway hit for consumers who do not want to be tied to a contract. The release of Nexus 4 and the Nexus 10 tablet is aimed towards competing effectively against Apple (AAPL) and the iPad/iPhone. Last week, Apple launched the iPad mini at retailers for $329, far higher than Google’s (GOOG) $199 for 16GB and $249 for the 32GB. It could prove difficult for Apple to compete in this segment.
In the 10-inch tablet segment, Apple is the leader by market share with its iPad. Nexus 10 is Google’s release that hopes to change that dominance. The tablet has 2560×1600 resolution and a better battery life than Nexus 7. The applications available for Nexus 10 are limited, which will, for the short-term, support the case for consumers choosing the iPad. Still, Nexus 10 costs $399, fully $100 less than an iPad.
Google updated the Music Explorer on Android 4.2 for the tablet. The site displays similar artists using a bubble user-interface:
(Image Source: Engadget)
On the smartphone front, Google’s Nexus 4 offers a few new things. It supports wireless charging (this was first offered by Nokia’s Lumia) and Near-field communications (“NFC”). Given the success of Samsung’s Galaxy III, Nexus, priced lower, could benefit. Nexus 4 has a few things worth mentioning when it comes to the suppliers:
- HD IPS PLUS display
- Gorilla Glass 2 – Corning (GLW)
- 1.5GHz quad-core Snapdragon S4 Pro (APQ8064) – Qualcomm (QCOM)
- Integration of touch and display – LG (LPL)
- Jelly Bean 4.2 operating system – Google (GOOG)
Analysis
Apple reported a trough in profit margins, which the CEO explained was due to the launch of so many new products. Some of the previous suppliers for Android mobile devices failed to benefit. NVIDIA (NVDA), for example, failed to impress investors as a graphics chip supplier for various Android devices.
Could it be different this time?
Business Section: Investing Ideas
Companies supplying parts for Google Nexus are listed below.
1. Corning Inc. (GLW, Earnings, Analysts, Financials): Manufactures and processes specialty glass and ceramics products worldwide. Market cap at $17.51B, most recent closing price at $11.85.
2. QUALCOMM Incorporated (QCOM, Earnings, Analysts, Financials): Engages in the development, design, manufacture, and marketing of digital wireless telecommunications products and services. Market cap at $102.93B, most recent closing price at $60.43.
3. LG Display Co., Ltd. (LPL, Earnings, Analysts, Financials): Engages in the manufacture and supply of thin film transistor liquid crystal displays (TFT-LCD) to original equipment manufacturers and multinational corporations primarily in Asia, the United States, and Europe. Market cap at $11.37B, most recent closing price at $15.89. Shares are trading at a 52-week high. After Samsung ended its LCD supply contract with Apple, LG could benefit.
Companies mentioned above are:
4. Google Inc. (GOOG, Earnings, Analysts, Financials): Google is the world’s most popular search engine. Market cap at $224.41B, most recent closing price at $682.96.
5. Apple Inc. (AAPL, Earnings, Analysts, Financials): Designs, manufactures, and markets personal computers, mobile communication and media devices, and portable digital music players, as well as sells related software, services, peripherals, networking solutions, and third-party digital content and applications worldwide. Market cap at $549.95B, most recent closing price at $584.62.
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Dig Deeper: Access Company Snapshots, Charts, Filings
- Corning Inc. (GLW, Chart, Download SEC Filings)
- QUALCOMM Incorporated (QCOM, Chart, Download SEC Filings)
- LG Display Co., Ltd. (LPL, Chart, Download SEC Filings)
- Google Inc. (GOOG, Chart, Download SEC Filings)
- Apple Inc. (AAPL, Chart, Download SEC Filings)
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Qualcomm's earnings quarter:
141M MSM baseband chips shipped, only even with FQ3 and +11% Y/Y, but near high end of guidance range. ASP for royalty-bearing devices was $216-$222, below FQ3 but above year-ago period. 210M-214M royalty-bearing devices sold in June quarter, up from 187M-191M in year-ago period. MSM shipments expected to surge to 168M in FQ1. 1B-1.07B device sales expected in CY13, up from CY12's 880M-930M. FY13 ASP forecast of $214-$226, roughly even with FY12. $841M in shares repurchased. R&D expenses +31% Y/Y. QCOM +7.5% AH.
Revenue of $4.87B (+18% Y/Y) beats by $200M. Expects FQ1 revenue of $5.6B-$6.1B and EPS of $1.08-$1.16, above a consensus of $5.29B and $1.00. Expects FY13 revenue of $23B-$24B and EPS of $4.12-$4.32, largely above a consensus of $21.7B and $4.13.
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