The folks over at iFixit took their screwdrivers and Torx wrenches to Google's (NASDAQ:GOOG) new flagship smartphone, the Nexus 4, in the process uncovering the supply chain winners and losers for the device.
A lot of the same vendors for those devices also won slots in Google's Nexus 4.
I've talked a lot about Qualcomm (NASDAQ:QCOM) and the success it's having in both mobile processors and basebands. Given high profile wins for its Snapdragon line, including at Samsung (OTC:SSNLF), Sony (NYSE:SNE) and Nokia (NYSE:NOK), it's not shocking to see it won the processor slot for the Nexus 4 too.
Qualcomm's Snapdragon success - alongside success at competitor Nvidia (NASDAQ:NVDA) whose Tegra 3 powers the new Surface - is likely behind Texas Instruments (NASDAQ:TXN) decision to walk away from future mobile development of its OMAP processors. The decision by Texas Instruments effectively puts Amazon's Kindle and Barnes & Noble's (NYSE:BKS) Nook up for grabs going forward, potentially allowing Qualcomm or Nvidia to gain an even greater stranglehold on the mobile processor business.
Even more interesting is Google's agnostic approach to the two players. For example, its Nexus 7 tablet is powered by Nvidia's Tegra 3. Clearly, we'll have to watch how this plays out in the next generation.
Qualcomm's wins didn't stop with the Nexus 4 processor either. They also provide the MDM9215M 4G GSM/CDMA modem and a 4G LTE chip, WTR1605L. Unfortunately, the LTE chip would be a lot more interesting to Nexus 4 users if it was actually paired with an LTE radio.
Additionally, Qualcomm provides two power management chips, the PM8921 and the PM8821. Finally, in a blow to both Wolfson and Cirrus (NASDAQ:CRUS), Qualcomm's WCD9310 audio codec got the nod.
LG makes the phone for Google and it also makes the battery inside the phone. And, it probably isn't too surprising to see the display was made by LG Display (NYSE:LPL).
Instead of ST Micro (NYSE:STM), Google chose InvenSense (NYSE:INVN) for the device's gyro and accelerometer. InvenSense also won the slot in the Nexus 7 and the Kindle Fire HD, which also rely on the company's MDU-6050 to handle motion.
Avago (NASDAQ:AVGO) also appears to be a big winner. Inside the Nexus 4 Avago won slots for its ACPM-7521 Quad Band GSM/Edge and Dual Band UMTS Power amplifier. It also supplies the 3012 ultra low noise front end module.
Broadcom (BRCM) appears to have come up a bit light. But, it does provide the BCM20793S - a near field communications controller to allow for integration with other devices, such as smart televisions.
Given Google's Nexus 7 tablet is rumored on pace to notch 5 million units sold since its July launch, investors in the company's supply chain should be paying attention. Early reports have shown out of stock for the Nexus 4, including as of earlier today. If it has similar success as the Nexus 7, volume upside at suppliers will help pricing power and margins, which should offer tailwinds into 2013.
Disclosure: I am long QCOM, CRUS, AAPL. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.