Apple Inc. (NASDAQ:AAPL) is due to release the latest iteration of its smartphone, the iPhone 5s, this afternoon. The device is expected to be partnered with a Chinese-focused iPhone 5c. A new report from Goldman Sachs Group Inc. (NYSE:GS) takes a look at who the iPhone will effect in China, and what companies to buy into.
Goldman analysts Daiki Takayama, Donald Lu, Robert Yen, and Michael Bang lay out their view of the future of the component business in China in their interesting take on the release of the new iPhone. In the components business, there are always winners and losers, and they’re selected by Apple Inc. (NASDAQ:AAPL).
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Apple winners and losers
The companies most likely to succeed—and succeed greatly—on the release of the iPhone include Taiwan Semiconductor Mfg. Co. Ltd. (NYSE:TSM), Hon Hai Precision Industry Co., Ltd. (TPE:2317), and Catcher Technology Co., Ltd. (TPE:2474) among others.
Taiwan Semiconductor Mfg. Co. Ltd. (NYSE:TSM) inked a three year deal to manufacture chips for the iPhone back in July, but the company’s shares have not responded all that positively to the change. On its home market in Taiwan, the company’s stock has actually dropped since July.
The Goldman analysis reckon that this makes now a great time to buy in, and rates the company a strong buy. Investors should increase their positions in the business according to the analysis, as the market has not yet priced in the potential upside resulting from the Apple contract.
Hon Hai Precision Industry Co., Ltd. (TPE:2317) works as an assembler of the mobile devices made by Apple Inc. (NASDAQ:AAPL). The firm has seen shares slide through 2013, a trend the Goldman Sachs analysts do not see continuing as the Apple Inc. (NASDAQ:AAPL) product cycle is likely to drive higher revenues.
Three of the interesting picks in the report are grouped together: Largan, AAC, and Goertek. The company rates all of the firms a buy. Goldman Sachs thinks the big differentiating factor in future smartphones will be optics and acoustics features. Those three companies are well positioned to benefits from Apple Inc. (NASDAQ:AAPL) efforts in that area.
Apple iPhone launch
The Apple Inc. (NASDAQ:AAPL) iPhone 5s and iPhone 5c will be launched today, and the phones are tipped to have a dramatic effect on China. Investors are looking for opportunities from Apple investments, and Goldman Sachs have some good ideas about what to aim for.