1 Stock that could Cash in on the iPhone5
Tyler is a member of The Motley Fool Blog Network -- entries represent the personal opinion of the blogger and are not formally edited.
If there was anything that can help your company turn some heads, it is to be involved with the new iPhone. Based on the rumors surrounding the iPhone 5 release this fall, the company that will be on a lot of investors' tongues will be NXP Semiconductors (NASDAQ: NXPI).
This Dutch semiconductor company is going to be talked about for some time because of its position in the near field communications (NFC) market. They are, after all, the leader in both research and manufacturing for near field communication chips. These chips are and will be the backbone for allowing mobile devices that are close to each other to recognize each other. Right now, the primary function for NFC is for secure mobile to mobile payment. It is still a young technology and it is possible that it could result in other discoveriees down the road.
Google (NASDAQ: GOOG) has gone all in with NFC. The company has been putting NFC capacity in all of its recent Android releases for both their smart phones and tablets. They are also looking to get out ahead of the competition with the introduction of Google Wallet. Samsung has added NFC capacity to its Galaxy SIII phones, and guess who is supplying those chips -- none other than NXP. Microsoft (NASDAQ: MSFT) will be using NXP for all Windows 8 mobile devices, and Motorola (NYSE: MSI) is also following suit with its Droid Razr, although it is not advertised.
But as the title of this article suggests, the big catch that NXP is looking to land is Apple (NASDAQ: AAPL). There are rumors abound that the new iPhone 5 -- due out in the fall -- will include NFC capacity. Now, it may be a bit presumptuous to assume that NXP will be the supplier of these chips, but it would be hard to believe that Apple would pass up on the industry leader on this one. It also should be noted that NXP does supply Apple with some of its other products already. So the combination of a superior product and a previous working relationship, it would be no shock to anyone that NXP will be the NFC provider for Apple.
With all major producers of smart phones and tablets behind this single company, they have positioned themselves as the company that will dictate the development of this sector. What is promising for this chip manufacturer is that the infrastructure for this new communication method is still in relative infancy, which means there is more than likely a wide range of clients who will be lining up for their product.
As this company grows, it would be well advised to shore up its balance sheet. Taking a fundamentals-only approach to this company could scare off a lot of investors with their high debt levels and their less than stellar revenue reports over the last two quarters compared to year-over-year numbers. For right now though, the future looks too promising to give up on them. They still have plenty of time to shore up those fundamentals as the sector starts to surge.
TylerCrowe holds shares in Apple and NXP Semiconductors. The Motley Fool owns shares of Apple, Google, and Microsoft. Motley Fool newsletter services recommend Apple, Google, Microsoft, and NXP Semiconductors. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. If you have questions about this post or the Fool’s blog network, click here for information.
