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iPhone 5 Release: Who Wins & Who Loses?

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In an event that was attended by top analysts and heavyweight investors, Apple went ahead and launched the much anticipated iPhone 5 on Wednesday. Merely a day after the launch, the effects of the iPhone 5 on the wider tech market have already started weighing in. Multiple reports indicate that the iPhone 5 will be a key game changer, as far as general stock performance in the market is concerned.

iPhone 5 Release: Who Wins & Who Loses?

The winners

It would be inappropriate to mention the winners without taking a look at Apple Inc. (NASDAQ:AAPL). A fresh report, compiled and published by Morgan Stanley (NYSE:MS), recommends a buy, while at the same time highlighting Apple’s unique and unmatched innovation.

Despite the incredible capabilities exhibited by the iPhone 5, Morgan Stanley (NYSE:MS)’s report notes that investors are still weighing their decisions. Most investors bear conservative near-term expectations, this signals the stock’s stability, and more importantly its ability to gain tremendously, once the iPhone 5 fully filters through the smartphone market.

Apart from benefitting Apple and perhaps steering its stock to the coveted $1000 point by the February 2013, the iPhone 5 is also expected to greatly benefit a host of other companies.

Here is a concise overview of the companies that will benefit.

In a report compiled and published by RBC Capital markets, Jabil has been found to be a key material beneficiary of the iPhone 5. It expected to glean more than 10 percent of its revenue from the iPhone 5.

Jabil Circuit, Inc. (NYSE:JBL) is involved in the manufacturing of casings for handsets, and is believed to be a key contributor to the unibody alumumium casing flaunted by the iPhone 5. The handset’s casing demonstrates the level of detail that Jabil put into the phone- its carefully selected dimensions and unique characteristics couldn’t say less.

As expected, this casing alone is bound to lure in a lot of buyers. The level to which Jabil will benefit is expected to be reflected at the close of the November and February quarters.

Molex Incorporated (NASDAQ:MOLX) is also expected to be a major winner, with estimates of revenue gain from the iPhone 5 coming in at around 5 percent. The company supplies multiple connectors for the iPhone 5, and RBC Capital Markets believe that each iPhone has an estimated $3 to $4 worth of connectors in it.

Amphenol Corporation (NYSE:APH) and Flextronics International Ltd. (NASDAQ:FLEX) are also expected to reap an estimated 2 to 3 percent of their revenues from the iPhone 5. APH provides dynamic antennas, while FLEX provides power cubes.

The losers

As expected, the iPhone 5 will stall, and in some cases fully disrupt, progress in rivaling companies. One big company that is expected to feel the weight of the iPhone 5 is Samsung. The South Korean tech heavyweight already launched iPhone 5’s equivalent – the Galaxy S3- some time back, and may risk losing out on market share. To aggravate its situation, it recently lost a patent case, and will have to rummage through countless ideas in order to match Apple’s innovation.

Google Inc (NASDAQ:GOOG) will also be affected, though remotely. App developers are currently trailing the iPhone 5 and its iOS 6. Similarly, it has also been affected by Samsung’s setbacks.

As a round up, the iPhone 5-albeit new- has already started creating rifts in the market. After the product is fully absorbed into the global market, more evident shakeups are expected throughout the industry.

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Sheeraz Raza

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