Apple Spearheads Drive to Chips for Wireless Devices
The following commentary comes from an independent investor or market observer as part of TheStreet's guest contributor program, which is separate from the company's news coverage.
NEW YORK (
) --The iPhone and the iPad have helped
Apple
(AAPL) - Get Report
lead the global trend in chip expenditure that has pushed wireless devices past the sales of computer chips.
According to an iSuppli report, wireless devices have become the largest consumers of the semiconductor market, and account for 24% of the total chips sold. The report also mentioned that Apple was, by far, the largest spender on semiconductors in the tablet space with an expenditure of $4.6 billion, followed by Samsung at $600 million and HTC at $200 million.
The iPhone accounts for more than 50%, and iPad for around 13% of our
$550 price estimate for Apple stock . Our price estimate is about 20% above market price.
See our complete analysis of Apple
here.
As shown in the above chart, the wireless devices chips market surpassed the PC semiconductors market before in 2009, but the trend reverted in 2010. However this time it looks like the trend is here to stay much longer.
Last year the chips sales for wireless products amounted to $58.6 billion, an increase of 14.5% over 2010. By contrast, PC chip sales grew just 4% to $53.7 billion during the same period. This gap is expected to widen in the coming years, considering that the PC market growth will continue to lag the growth in smartphone and tablet market.
The iPhone and the iPad are leading the overall wireless market growth. Interestingly, last week during the earnings conference call, Apple CEO Tim Cook stated that he sees the iPad as a huge opportunity for Apple over time, and that there will come a time when the tablet market and units will be larger than the PC market.
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This commentary comes from an independent investor or market observer as part of TheStreet guest contributor program. The views expressed are those of the author and do not necessarily represent the views of TheStreet or its management.
