Is 'Cheap' iPhone a Boon for Apple Suppliers?
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Overall Analyst Rating:
NEUTRAL (= Flat)
Dividend Yield: 0.5%
EPS Growth %: -0.7%
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An overlooked part of news that Apple (Nasdaq: AAPL) is working on a cheaper version on the iPhone is what such a device could mean for Apple's many suppliers. Think about the potential of an additional 100 million iPhones being sold on an annual basis...
While a potential positive, a boon from a cheaper iPhone is not cut and dry. If Apple is going to make a product with a $149-$199 price point suppliers will likely see a major squeeze on margins. While margins will likely be hit, the increased volume could still boost the bottom line - which is ultimately the point.
Apple supplier are mostly higher Wednesday: Qualcomm Inc. (Nasdaq: QCOM) is up 1.3 percent, Broadcom Corp. (Nasdaq: BRCM) is up 1.5 percent, Skyworks Solutions Inc. (Nasdaq: SWKS) is up 3 percent, Avago Technologies (Nasdaq: AVGO) is up 1.8 percent, Cirrus Logic Inc. (Nasdaq: CRUS) is up 0.2 percent, and TriQuint (Nasdaq: TQNT) is down 2%. Flash memory provider SanDisk (Nasdaq: SNDK) could also be on watch.
While a potential positive, a boon from a cheaper iPhone is not cut and dry. If Apple is going to make a product with a $149-$199 price point suppliers will likely see a major squeeze on margins. While margins will likely be hit, the increased volume could still boost the bottom line - which is ultimately the point.
Apple supplier are mostly higher Wednesday: Qualcomm Inc. (Nasdaq: QCOM) is up 1.3 percent, Broadcom Corp. (Nasdaq: BRCM) is up 1.5 percent, Skyworks Solutions Inc. (Nasdaq: SWKS) is up 3 percent, Avago Technologies (Nasdaq: AVGO) is up 1.8 percent, Cirrus Logic Inc. (Nasdaq: CRUS) is up 0.2 percent, and TriQuint (Nasdaq: TQNT) is down 2%. Flash memory provider SanDisk (Nasdaq: SNDK) could also be on watch.
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