Apple (AAPL) shares reached an all-time high recently, helped by speculation that the company will release an iPhone 5, an iTV, and an iPad “mini.” After rising 62.7% in the year-to-date, Apple now has a market capitalization of $615 billion. The circulating rumors for the next-generation iPhone release in September are driving shares up. This is supported by strong sales data from component suppliers. The device may also be launched on China Mobile (CHL) in 2013. All of these data points suggest an imminent iPhone successor soon.
Investors have a short memory. Rumors of an iPhone 5 circulated before the 4S was released. The 4S introduced voice-recognition powered with “Siri.”
Wild speculation helped propel Apple shares higher. Investors wary of buying shares now should look at component makers who will benefit from an iPhone 5 launch or a launch of any of other new tablet devices.
The companies are:
1. Nuance Communications, Inc. (NUAN, Earnings, Analysts, Financials): Provides voice and language solutions for businesses and consumers worldwide. Market cap at $7.49B, most recent closing price at $24.32. Nuance played an integral role in the development of Siri before Apple acquired it. Nuance is developing Nina, a virtual assistant for mobile customer service apps.
2. OmniVision Technologies Inc. (OVTI, Earnings, Analysts, Financials): Designs, develops, and markets semiconductor image-sensor devices. Market cap at $822.29M, most recent closing price at $15.37. Apple’s iPhone 4S uses the OV8830 sensor made by OmniVision. If Apple continues to use this sensor, it will be even more beneficial because the demand for the iPhone 5 will be high compared to the 4S. Omnivision reports earnings on August 30 2012 after the market closes.
3. SanDisk Corp. (SNDK, Earnings, Analysts, Financials): Designs, develops, manufactures, and markets NAND-based flash data storage card products that are used in various consumer electronics products. Market cap at $10.38B, most recent closing price at $42.98. SanDisk makes storage for Apple’s iPod Nano. The company would be a potential supplier for an Apple “mini” tablet.
4. QUALCOMM Incorporated (QCOM, Earnings, Analysts, Financials): Engages in the development, design, manufacture, and marketing of digital wireless telecommunications products and services. Market cap at $105.74B, most recent closing price at $62.08. Qualcomm, while supply-constrained for 28nm chips, could still be selected by Apple to supply 4G LTE chips.
5. Broadcom Corp. (BRCM, Earnings, Analysts, Financials): Designs and develops semiconductors for wired and wireless communications. Market cap at $19.78B, most recent closing price at $35.39. Broadcom would be a potential supplier for new Apple tablets.
Smartphone makers that will be hurt by more competition from Apple are:
6. Microsoft Corporation (MSFT, Earnings, Analysts, Financials): Develops, licenses, and supports a range of software products and services for various computing devices worldwide. Market cap at $258.21B, most recent closing price at $30.80. Microsoft is racing to release the Windows Phone 8 before Apple’s iPhone 5.
7. Nokia Corporation (NOK, Earnings, Analysts, Financials): Provides Internet and digital mapping and navigation services worldwide. Market cap at $10.58B, most recent closing price at $2.76. Microsoft-partner Nokia saw Windows Phone 7 sales drop after Windows Phone 8 was announced. Nokia will benefit from stronger interest for the new Windows phone.
8. Research In Motion Limited (RIMM, Earnings, Analysts, Financials): Designs, manufactures, and markets wireless solutions for the worldwide mobile communications market. Market cap at $3.75B, most recent closing price at $7.16. RIM is launching its delayed Blackberry 10 (“BB10”) in Q1/2013.
9. Hewlett-Packard Company (HPQ, Earnings, Analysts, Financials): Hewlett-Packard Company offers various products, technologies, software, solutions, and services to individual consumers and small- and medium-sized businesses (SMBs), as well as to the government, health, and education sectors worldwide. Market cap at $39.3B, most recent closing price at $19.93. Stronger market share for Apple’s tablet will hurt computer sales for HP. HP is in a multi-year transition, and is looking for ways to boost profitability for its personal computing division.
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- Nuance Communications, Inc. (NUAN, Chart, Download SEC Filings)
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- SanDisk Corp. (SNDK, Chart, Download SEC Filings)
- QUALCOMM Incorporated (QCOM, Chart, Download SEC Filings)
- Broadcom Corp. (BRCM, Chart, Download SEC Filings)
- Microsoft Corporation (MSFT, Chart, Download SEC Filings)
- Nokia Corporation (NOK, Chart, Download SEC Filings)
- Research In Motion Limited (RIMM, Chart, Download SEC Filings)
- Hewlett-Packard Company (HPQ, Chart, Download SEC Filings)
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