Apple Inc. (NASDAQ:AAPL) products and devices not only affect the revenue stream of the company itself, but also of other companies. The iPhone 5 product cycle helps the suppliers to boost their revenues along with the Apple Inc. (NASDAQ:AAPL). Also, there are companies whose revenues are adversely affected by iPhone 5 Product cycle, mainly the traditional tech sectors like PC’s and printing. Apart from these two, there is another set of tech firms, Barclays Plc (LON:BARC) (NYSE:BCS) call them “Apple-safe”, that are related to “Big Data” and/or “Cloud Computing” segments that can drive profits, without being effected by Apple Inc. (NASDAQ:AAPL) product cycle.
As per the report from Barclays, the latest iPhone will adversely affect the demand for the handsets from HTC and other Taiwanese companies. While the Hon Hai could benefit from the iPhone product cycle, and its monthly iPhone capacity could jump to 20 million units, it could also ship up to 40-50 million iPhone 5 units in the fourth quarter, depending upon the panel availability. Hon Hai is the exclusive assembler (in 2012) for Apple Inc. (NASDAQ:AAPL), and could be responsible for 80-85 percent of the shipments in 2013. Another company in the supply chain, which could benefit, will be LG Display, which handles in-cell touch screen panels, the most expensive single component in iPhone. Given the shortages of in-cell touchscreens, LG could greatly benefit from the latest iPhone cycle. A Japanese company, Sharp (TYO: 6753) could also benefit from the display standpoint, but due to suspended production of the iPad panel, the Japanese firm could face a near term downside earning risk.
Coming to US semiconductor space, Qualcomm, Inc. (NASDAQ:QCOM) and Broadcom Corporation (NASDAQ:BRCM) could benefit largely from iPhone5. Analysts from Barclays believe that iPhone 5 will have Qualcomm’s 28nm MDM9615 4G/LTE baseband and will also have 40nm BCM4334 WiFi combo chip from Broadcom. Broadcom will benefit largely from the iPhone 5 ramp, plus the likely iPad mini, while Qualcomm will get a boost from the earlier than expected launch date, plus 28nm capacity constraints easing in the fourth quarter.
On the carrier side, the iPhone 5 announcement had a few surprises. Due to the rapid rollout of the iPhone, more than one million iPhone activations were rolled for 3rd quarter, for both AT&T Inc. (NYSE:T) and Verizon Communications Inc. (NYSE:VZ). Apart from these, both the carriers have changed their upgrade policies to manage higher upgrade activities that often accompany each iPhone launch. AT&T doubled its upgrade fee and tightened its upgrade eligibility policy, while Verizon started imposing a $30 upgrade fee earlier this year. The analyst from Barclays are also optimistic about tower names SBA Comm and Crown Castle as the “launch of iPhone 5 will dramatically accelerate deployment of LTE devices, adding LTE traffic demand, and driving continued LTE network upgrades.”
