This column has been updated with information on Broadcom's July quarter earnings report and related wireless chip sales guidance.
As Apple Inc. (AAPL) surged in early August after beating estimates and issuing guidance that suggested fears of major iPhone 8 shipment delays were overblown, several historical iPhone/iPad suppliers naturally went along for the ride.
But those looking to invest in Apple suppliers ahead of the launch of the next flagship iPhone, and the upgrade "super-cycle" that it's expected to drive, should keep in mind that the iPhone 8 is expected to yield some big changes in how much chip content many suppliers provide.
In addition, it looks as if some new names will be added to Apple's supplier list, and that one or two historical suppliers will get shut out of the iPhone 8.
Broadcom Ltd. (AVGO) , which has long been supplying RF power amplifier modules, Wi-Fi/Bluetooth combo chips and GPS chips for iPhones, is shaping up to be a big iPhone 8 winner. On its April quarter earnings call, the company signaled the iPhone 8 would provide it with a 40% dollar-based content increase relative to the iPhone 7, via its use of 8 Broadcom products.
Broadcom saw a post-earnings selloff on August 25, as its slightly above-consensus October quarter guidance left markets wanting more after a big 2017 run-up. But while the company reported seeing some weakness in the enterprise hard drive and Chinese telecom equipment markets, it also forecast that its wireless chip sales would rise 30% to 40% sequentially thanks to the iPhone 8 ramp. In addition, Broadcom expects wireless sales to be roughly flat sequentially in a January quarter that has typically seen seasonal declines.
The fact smartphone RF subsystems continue to become more complex -- this is both due to growth in the number of frequency bands supported by phones, and the use of more advanced 4G standards than enable things like gigabit peak download speeds -- has been driving content gains for Broadcom at both Apple and Samsung. That's thanks partly to the company's status as the leading maker of the advanced FBAR filters used in many 4G amplifier modules. Demand for more powerful Wi-Fi radios containing multiple transmitters and receivers (MIMO) has also been helping.
But the biggest driver behind the 40% content gain might be the Apple's use of a Broadcom chip to enable the much-rumored wireless charging abilities of its upcoming phones. In February, JPMorgan reported Apple and Broadcom have been working on a wireless charging system that will provide "best-in-class performance" for two years. Around the same time, KGI Securities reported that the iPhone 7S models launching in tandem with the iPhone 8 will also support wireless charging.
More of What's Trending on TheStreet: