Apple supplier stocks could surge after Apple debuts iPhone 6

By Chris Lau for Kapitall.

Rumors are swirling again that Apple ( AAPL) will announce an iPhone 6 as early as September 16th. If an iWatch is announced, along with a refresh to the iPad, this could send Apple shares much higher than current levels. Apple stock recently came close to $100, but backed off as markets retreated.

Specifications

Apple is widely expected to boost the display size of the iPhone to at least 4.7 inches and as big as 5.5 inches. If true, Corning ( GLW) and GT Advanced Technologies Inc. ( GTAT) would benefit from the iPhone refresh. Corning recently reported quarterly results that hurt its stock price. The maker of Gorilla Glass reported lower gross margins. In Q2, its margins dropped 300 basis points from the prior year to 41.6%. Gorilla glass sales did not improve this year.

Corning might be facing competition from GT Advanced, which received upfront payments from Apple to develop sapphire. The firm now has over 2,000 sapphire furnaces in Arizona.

Strong Fall and holiday season expected

The timely iPhone release will benefit Apple’s fall and holiday quarters. Though profit margins for the iPhone are still strong, consumers took a liking to Android phones in recent years. Thanks to Samsung and other device makers, phones with larger more comfortable screen sizes found strong demand. In recent months, Samsung reported lighter demand for its flagship Galaxy smartphone. To compete effectively against Apple, Samsung will need to attract consumers with features other than a large screen size.

Bright future for Apple

Ultimately, this is Apple’s time to shine again when the iPhone is refreshed. Still, the bigger story will relate to how Apple integrates its Beats acquisition with iTunes, an iWatch, and a refresh to the iPad.

Click on the interactive chart to view data over time. 

 

1. Apple Inc. ( AAPL): Designs, manufactures, and markets personal computers, mobile communication and media devices, and portable digital music players, as well as sells related software, services, peripherals, networking solutions, and third-party digital content and applications worldwide. Market cap at $472.72B, most recent closing price at $527.55.

 

 

2. Corning Inc. ( GLW): Corning Incorporated manufactures and processes specialty glass and ceramics products worldwide. Market cap at $27.3B, most recent closing price at $19.31.

 

 

3. GT Advanced Technologies Inc. ( GTAT): Provides polysilicon production technology and multicrystalline ingot growth systems, and related photovoltaic (PV) manufacturing services for the solar industry worldwide. Market cap at $1.73B, most recent closing price at $14.14.

 

 

Kapitall Wire is a division of New Kapitall Holdings, LLC. Kapitall Generation, LLC is a wholly owned subsidiary of New Kapitall Holdings, LLC. Kapitall Wire offers free investing ideas, intended for educational information purposes only. It should not be construed as an offer to buy or sell securities, or any other product or service provided by New Kapitall Holdings, LLC, and its affiliate companies.

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