One iPhone 5 Supplier Is a Standout: Link

NEW YORK (TheStreet) -- In this interview with Lindsey Bell, Stephanie Link discusses the attractiveness of Apple's suppliers. A full transcript appears below.

Lindsey Bell:
Investors often use Apple suppliers as a play on the Apple ecosystem. The iPhone 5 came out last Friday and people are digging into its components. The stocks of these Apple suppliers have been down since the release of the new iPhone. What's going on here?

Stephanie Link:
Yeah. I mean I think that there's some concern that maybe the iPhone 5, the unit growth, is not what people had expected initially. Remember that first weekend it was only five million units. I think it's a temporary thing. I think it's a supply issue -- they can't get the products out the door fast enough. So, I think over time if you average in the September quarter and December quarter for Apple and the iPhones in general, I think you will see something like 50 to 60 million units. That is very impressive to me.

So, I think that the suppliers, particularly the ones that have not participated in the rally like a Broadcom, like a Skyworks, those are quality names that are increasing their content and their dollar per content on the iPhone. Overall, that should help revenues going forward.

Lindsey Bell:
Broadcom is one that you do own. They have increased their exposure to the -- what's it mean for the bottom line?

Stephanie Link:
Yeah. I think that you're looking at them not only making the combo chips, that we know. Wi-Fi and GSM, that's what they're really known for and what they're really great at. That could be something like $5 to $7 per phone of content. Then they're also now on the touchscreen too. That could be, say, $2 or $3 dollars of new revenue, new content per phone. We don't know the numbers. We're all kind of speculating but I think you're talking about low single digits.

What does it mean? It means that this company continues to gain market share. It means that no matter who tries, Qualcomm tries, to make a combo chip they're not in the iPhone 5 and they probably won't be for some time because Broadcom has a superior technology. To me, that's why you want to own it. 15 percent of their revenues are tied to Apple. Another 10 percent are tied to Samsung. Those are the two big players in the smartphone space. Broadcom's stock trades at a discount to Qualcomm, so I like Broadcom.

Lindsey Bell:
You like Broadcom better there. Okay. What about Intel? This stock, they're trying to get into the smartphone/mobile business, but they've been lagging. Can they be a viable competitor next year, maybe?

Stephanie Link:
I would not buy Intel for their smartphone exposure at all. If it comes, that's great. If they have struggles, you want to look at the valuation. The stock has gone from $28 down to the low $20s. It now yields four percent. Everybody knows it's a PC-related company. We know it. That's why the stock has fallen so much. You've had so many downgrades. You had this love fest when it was at $28 and now you have everybody hating it at $22. I think it's actually very interesting with a four percent dividend yield.

Lindsey Bell:
Would you buy it?

Stephanie Link:
We'll have to see.