Telecom

Return to Article

Meet iPhone's A-Team Suppliers

Scott Moritz

Apple's (AAPL Quote - Cramer on AAPL - Stock Picks) iPhone innards have been revealed, giving investors a key supplier list to ponder.

Research analysts at RBC cracked open a few iPhones and solved the long-running mystery about just which chipmakers would wind up in the guts of the blockbuster mobile phone.

For starters, Intel (INTC Quote - Cramer on INTC - Stock Picks) is not the core chip. Samsung, rather, won the iPhone's main processor job, says RBC.

The news probably comes as little surprise to Intel watchers, who had been warned in advance about getting stiffed on the processor. Intel says it's not a total shutout; the company supplies the 32-megabit flash memory for the iPhone.

The crack team at RBC also identified Broadcom's (BRCM Quote - Cramer on BRCM - Stock Picks) input/output controller chip in the device, confirming speculation that the Irvine, Calif. tech shop was part of the iPhone action. And not to be left out, wireless-chip giant Texas Instruments (TXN Quote - Cramer on TXN - Stock Picks) got the power-management slot.

Other suppliers include Marvell (MRVL Quote - Cramer on MRVL - Stock Picks) with its WiFi chip, Micron (MU Quote - Cramer on MU - Stock Picks) as the producer of the two-megapixel camera sensor and Skyworks (SWKS Quote - Cramer on SWKS - Stock Picks) as the provider of the iPhone's front-end power amplifier, says RBC.

There seemed to be some uncertainty about who provided the iPhone's display drivers. RBC says National Semiconductor (NSM Quote - Cramer on NSM - Stock Picks) may be the supplier.

	How valuable do you think supplying iPhone components can be to a company? Answer Here

As recent tech history shows, getting a key chip into a hot product has proven to be a lucrative gig for some suppliers. For instance, Analog Devices (ADI Quote - Cramer on ADI - Stock Picks) provides chips for the Nintendo Wii, and the company has seen its shares jump 19% since the introduction of the perpetually sold out video-game player on Nov. 19.

Sales of the iPhone started Friday and analysts say that the debut topped expectations. Piper Jaffray analyst Gene Munster counted 500,000 phones sold, more than twice his projection of 200,000. JPMorgan analyst Bill Shope figures that 312,000 iPhones were sold.

As TheStreet.com reported, a first-day sell out would probably mean at least 400,000 phones flew out the door. That kind of volume translates to more than $200 million in one-day revenue for Apple, which has said it plans to recognize the iPhone proceeds over a two-year period.

For AT&T (T Quote - Cramer on T - Stock Picks), the exclusive provider of the iPhone's wireless service, each sale means a two-year subscriber contract and a $35 activation fee.

In afternoon trading Monday, Skyworks was up 24 cents to $7.59, Broadcom was adding 40 cents to $29.65 and Texas Instruments increased 27 cents to 37.90. Meanwhile, Micron shares slid 15 cents to $12.38, National Semi was down 12 cents to $28.15 and Marvell was off 27 cents to $17.94.