These 3 Beaten-Up Apple (AAPL) Suppliers Will Do Just Fine - Analyst

Despite many Apple (Nasdaq: AAPL) suppliers getting caught up in the downdraft of the iPhone 5 component cut speculation, Canaccord Genuity analyst Bobby Burleson thinks Apple semiconductor suppliers could actually post better-than-expected results. He cites healthy substrate demand.

"We view healthy substrate demand for Apple's key semiconductor supply chain as positive for Apple-weighted names in our coverage universe, including Broadcom (Nasdaq: BRCM), Cirrus Logic (Nasdaq: CRUS), and OmniVision (Nasdaq: OVTI).

He sees Cirrus as the best play on a recovery for stocks in the Apple supply chain given its 28% sell-off since Q3 earnings and its industry-high 80% revenue exposure to Apple.

"We believe substrate demand from semiconductor suppliers levered to Apple was in line in Q4, while Q1 orders are generally above those for non-Apple suppliers," Burleson said. "Overall, we anticipate substrate demand in Q1 is likely to be down 5-10 percent sequentially, whereas substrate for Apple suppliers is likely to be flat, including power amplifiers, baseband and connectivity. This is slightly better than our previous expectation for Q1 substrate for Apple suppliers to be flat to down 5% and supports our view that key semiconductor suppliers to Apple are not seeing meaningful cuts."

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