Today, preorders of the new iPhone 5 began, for a select few countries around the globe, as the rest wait to join in the party a little later this month. However, very few are aware of behind the scenes beneficiaries of Apple’s latest product. perhaps some of you might be thinking of the carrier networks, and of course Apple Inc. (NASDAQ:AAPL).
In truth, I cannot deny that your thoughts are right, but not absolutely. Indeed, there are several beneficiaries in the latest device by Apple Inc. (NASDAQ:AAPL). Just try to think of the supply chain; as revealed in one of our earlier articles, Apple Inc. (NASDAQ:AAPL) invested a lot in readiness for iPhone 5, as we speak, the company has manufacturing components commitments valued at around $4.5 billion, $1.3 billion, went towards producing its latest set of devices. So who are these other beneficiaries?
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Teradyne, Inc. (NYSE:TER)
Looking at Apple Inc. (NASDAQ:AAPL) iPhone 5 hardware, Credit Suisse Equity Research analysts claim that Teradyne Inc. (NYSE:TER) was one of the major beneficiaries. Apple Inc. (NASDAQ:AAPL)’s dual band Wifi implementation played positively for the Massachusetts based semiconductor company. This is the same technology used by Amazon.com, Inc. (NASDAQ:AMZN) in its Kindle Fire devices.
Importantly, this technology increases the test time at the module test level – a product sold by Teradyne’s Litepoint division. Credit Suisse Equity Research Analysts note that, the strength Teradyne saw in 2Q12 in Litepoint, was in order to buy the equipment to build the iPhone 5 and devices like Kindle in 3Q12, so that they can be sold in 4Q12.
Furthermore, Teradyne stands to gain more if other smartphone and tablet manufacturers adopt this technology, come the next refresh in 2013, whereby Samsung Electronics Co. Ltd, Nokia Corporation (NYSE:NOK), among others are expected to follow in the example of Apple and Kindle fire.
ARM Holdings Plc (NASDAQ:ARMH) (LON.ARM)
Apple Inc. (NASDAQ:AAPL) revealed that the new iPhone five will be running on dual core ARM-A15 cores, which makes the device CPU twice as fast as compared to predecessors. Apple picked this option at the expense of using the quad core ARM-A9 solution.
Additionally, the report indicates that Apple also increased its expenditure on die A6 by 30%, as compared to the cost spent on die A5, while this will be a staggering 100% increment in expense on SoC, as compared to the cost of die A4. This leaves the microprocessor manufacturer, ARM, to benefit, notes the report, if the statistics released by Market Research firm UBM are anything to go by..
While a majority expected updates on NAND for the new range of iPhone 5 devices, it was not to be, as the company maintained the current 16GB, 32GB, and 64GB. Apple chose to increase the NAND content in the new devices, thereby affecting some company’s which otherwise stood to gain more had the iPhone maker opted otherwise.
KLA-Tencor Corp. (NASDAQ:KLAC), and Lam Research Corporation (NASDAQ:LRCX)
While clearly we cant say that these two companies lost big time, following Apple’s failure to increase NAND content in its newest devices, it would be rather optimistic to ignore the fact of the opportunity cost. The two semiconductor companies would have gained more, had Apple opted to increased its NAND to include, for instance, 128GB.
This would have not only resulted in increases in sales, but also more potential sales, as other companies would soon have followed suit. For now, competitors can sit on a little bit more of a comfort zone in that regard.
Other obvious beneficiaries in coming up with iPhone 5 include Taiwan Semiconductor Manufacturing, Japan’s Elpida Memory and Toshiba, and Korea’s SK Hynix as the main suppliers of its DRAM memory chips, as covered in our earlier article, where we revealed Apple’s plans to slash Samsung from its hot list of its vendors.