Apple (AAPL) has now become one of the largest users of semiconductors. Every time Apple introduces a new product, it pays to understand its impact on semiconductor manufacturers. In the past, such analysis has provided excellent opportunities both on the long and short side.
The iPhone 4S is no different. This phone looks the same as the old iPhone 4, but its insides are completely redesigned. On the launch weekend, it is estimated that 4,000,000 iPhone 4S units will be sold. By comparison, the iPhone 4 sold 1,700,000 units on its launch weekend.
The starting point always is to understand the differences between expectations of Wall Street and the actual semiconductors in the product. After this analysis, it pays to use a proven method, such as the ZYX Change Method to refine and time trade entries and exits. As my long-time readers know, I prefer to buy or short sell when all six screens of the ZYX Change Method are satisfied.
The iPhone 4S is very new and the following information of the semiconductors used in the phone is to be considered preliminary information. Following are eight companies of interest:
Arms Holdings (ARMH)
The iPhone 4S contains an A5 processor. Apple designs its own CPU A5 Dual-core Processor around the technology licensed from Arms Holdings. This was widely expected and therefore, there is no new investment trigger in this stock.
The iPhone 4S contains RTR8605 Multi-band/mode RF Transceiver and MDM6610 chipset from Qualcomm. This was widely expected and therefore there is no new investment trigger in this stock.
The iPhone 4S contains Skyworks 77464-20 Load-Insensitive Power Amplifier and apparently one more yet unidentified chip. This is less than expected. This information is a trigger for a short sell.
The iPhone 4S contains Avago ACPM-7181 Power Amplifier. This is in line with expectations.
The iPhone 4S contains TQM9M9030 Multi-Mode Quad-Band Power Amplifier Module and another yet unverified chip. This is more than expected. This information is a trigger for a buy.
The iPhone 4S contains THGVX1G7D2GLA08 16 GB 24 nm MLC NAND flash memory from Toshiba. Toshiba is a very large company and this development is of no significance.
OmniVision provides image sensors. The iPhone 4S has two sensors and at present, it is not clear if OmniVision has provided both sensors or only one sensor. If it turns out that OmniVision has provided both sensors, then OmniVision will be an excellent buy.
The speculation has been that Apple would split its image sensor business between Sony and OmniVision. We are still trying to track down this information. In any case, Sony is a very big company and the iPhone 4S business is not of much consequence.