LG (LPL) and Google (GOOG) are reportedly partnering to build a 5-inch Nexus smartphone. Specifications appeal to the Android user-base, and the phone will have:
· 5-inch HD screen
· NVIDIA (NVDA) Tegra 4 chip
· 2GB RAM
· 13 MP rear camera, 3MP front
· 8GB – 16 GB storageThe 8GB could be $299. A successor to the Nexus 7 tablet is also rumored. Sporting a 7.7-inch screen and a 1920×1200 resolution at 294ppi, the tablet would be powered by a Tegra 4 chip. If the rumors are true, consumers should expect the devices to debut in May 2013. The devices will run “Key Lime Pie,” the next operating system version succeeding “Jelly Bean.” Analysis: 2 Companies To Watch 1. LG Display Co., Ltd. (LPL): Engages in the manufacture and supply of thin film transistor liquid crystal displays (TFT-LCD) to original equipment manufacturers and multinational corporations primarily in Asia, the United States, and Europe. Market cap at $9.79B, most recent closing price at $13.68. LG Display stands to benefit if Google chooses the company to build the Nexus 5 and 7.7-inch tablet. Asus is the current supplier for Nexus 7. Since November, shares traded down steadily, falling 20% from a 52-week high. LG is also a supplier for Apple’s (AAPL) iPhone. For the interim, LG’s share price will be impacted by quarterly results from Apple on January 23 after the market closes. Longer-term, a confirmation that LG will supply for Google will justify a higher valuation. Tool provided by Kapitall. Login to access free research tools, share practice portfolios, and more. 2. NVIDIA Corporation (NVDA): Provides visual computing, high performance computing, and mobile computing solutions that generate interactive graphics on various devices ranging from tablets and smart phones to notebooks and workstations. Market cap at $7.57B, most recent closing price at $12.11.
NVIDIA relies on the success of Android to increase mobile sales. The graphics chip maker was hurt by weak Motorola Xoom sales, which used the Tegra 2 processor, in 2011. Current Android-based tablets made by Google and Lenovo are powered by NVIDIA’s Tegra 3.
NVIDIA Tegra 4 competes with Qualcomm’s (QCOM) Snapdragon 800. The Tegra 4 is powerful: it supports HDR photography well, runs on 4 CPU cores, and has 72 GeForce GPU cores. Yet, Qualcomm is still the preferred chip for SoC, because the Snapdragon chip have connectivity modules.
The average 1-year return for these 2 stocks is -6%.
Written by Kapitall's Chris Lau .