The shares are overbought and rather fully valued here ($26+), unless there is a huge earnings surprise on the upside. Underlying trend is still intact, but I think that after the recent rally, there is more downward risk than upside potential for the immediate future.
A company called mCube has made a new kind of accelerometer, the device that senses motion from inside a smartphone or fitness monitor. The component is small and cheap enough to lead to smart electronics in clothing and sports equipment.
iFixit's teardown of the iPhone 6 Plus turned up five Qualcomm (NASDAQ:QCOM) chips, up from the three found in last year's teardown of the 5S and nearly matching the six found in certain Galaxy S5 teardowns.
In addition to the expected Cat-4 LTE baseband modem, a Qualcomm power management IC, RF transceiver, receive-only chip (needed to enable LTE carrier aggregation), and envelope-tracking IC (relatively new, improves battery life) were found in the 6 Plus.
In-line with rumors and the company's hints, an InvenSense (NYSE:INVN) motion sensor - specifically, a 6-axis gyroscope/accelerometer - was found. That suggests InvenSense has displaced STMicroelectronics (NYSE:STM) as the iPhone's motion sensor supplier.
Two Skyworks (NASDAQ:SWKS) power amplifier modules are found, including a low-band LTE part. Avago (NASDAQ:AVGO) has both a high-band amplifier module, and an integrated ultra high-band amplifier/FBAR filter module. TriQuint (NASDAQ:TQNT) cab claim a 3G amplifier module, and merger partner RF Micro (NASDAQ:RFMD) an antenna switch module.
Broadcom (NASDAQ:BRCM) appears to remain the iPhone's combo chip supplier (courtesy of a module from partner Murata), and also supplies a touch controller IC. Chipworks thinks Broadcom also has the Wi-Fi slot for the Apple Watch.
As expected, NXP (NASDAQ:NXPI) is supplying an NFC module and the M8 motion co-processsor and Cirrus Logic (NASDAQ:CRUS) the audio codec IC. Texas Instruments (NASDAQ:TXN) is providing a touch transmitter IC.
Moving in response: INVN +1.9%. AVGO +1.5%. STM -3.9%.
03-29-2015, 05:28 AM (This post was last modified: 03-29-2015, 05:30 AM by admin.)
Top 10 MEMS vendors in 2014 by revenue. Source: IHS.
InvenSense # 8
InvenSense was the fastest growing company in the top 10 with a 34 percent jump in MEMS sales to $332 million. The vast majority of his jump comes from a win for its 6-axis motion combo sensor in the iPhone 6 and 6+.
InvenSense is only scratching the surface with premium smartphones. Future market opportunities include IoT and wearables, along with growing the amount of content in existing smartphones. InvenSense continues to trade at an attractive valuation, with the market overly focused on the current gross margins due to a high concentration of revenue from Apple and Samsung.
The good news for the winners of the design slots – STMicroelectronics and NXP win two chip design slots each and AMS and Dialog Semiconductor one each – is that Yole reckons the wearable electronic equipment market is not just a gimmick and will grow steadily. Yole states that the wearable industry will reach 295 million units in 2020 with a market value of $90 billion.
Something strange has happened this year between Apple and companies that supply parts to its many products: Their stock performances have diverged, after a long period of moving up and down together. Even weirder is that this divergence is not based on which companies are more dependent on the tech giant.
Shares of major suppliers that generate significant portions of their revenue from Apple have held relatively steady despite Apple's stock getting crushed in the last few weeks. In fact, some of them even have outperformed Apple significantly over the longer run.
Year-to-date shares of Cirrus Logic, for example, are up roughly 13 percent as of the market's close Tuesday. The company develops high-precision analog and mixed-signal integrated circuits for a broad range of innovative customers including Apple.
Likewise, shares of Multi-Fineline Electronix, a company that provides printed circuit and assembly solution, are also up close to 7 percent. Compare that with Apple's stock, which is down over 11 percent in the period.
Surprisingly, other companies that have a more diversified supply chain have moved in line with Apple's stock recently and even underperformed the stock over the longer term.
For instance, InvenSense is down 25 percent since Apple reported earnings two weeks ago. The chip supplier's stock was punished Tuesday when it missed analysts' revenue expectations for the fourth quarter. Skyworks, too, is down 8 percent in the past two weeks and shares of Jabil Circuit and Broadcom are down close to 3 percent.
This contrasts with Apple shares' decline of more than 11 percent in the period. All four aforementioned companies get less than 30 percent of their revenue from Apple.
While some stocks may be mispriced, experts believe that the impact already has been seen on the supply chain from Apple's lowered numbers across companies highly dependent on Apple's business.
While their stocks weren't punished as badly, Apple's suppliers remain cautious about the second half of the year given uncertainty about sales of the yet-to-be released iPhone 7.
The best way to gauge Apple's future strength is to pay attention to the performance of these suppliers, Blair said.
"What we are doing at Grays Peak is paying a lot of attention to the supply chain," he said. "We are trying to understand what exactly is happening there. That is going to be the best indicator of what's going to occur."
Asked whether he is inclined to put money to work in companies that rely on Apple or others more diversified, Blair told CNBC that he prefers those that are more diversified and tied to emerging technologies segment, such as voice and voice-interface, where he sees growth, thus looking at companies that provide microphones, audio features and other related products.
