This commentary previously appeared on Real Money Pro on July 21, 2015, at 8:30 a.m. ET. Click here to learn about this dynamic market information service for active traders.
After today's market close, Apple (AAPL) will report quarterly earnings. No doubt, this will be a focal point all afternoon, and you should expect to hear all sorts of chatter about expectations for iPhone, iPad and Apple Watch shipments. Let's remember, however, there are a number of suppliers that stand to benefit, particularly if Apple delivers better-than-expected shipment numbers.
Remember, last quarter it crushed iPhone deliveries and it sounds like the company has enjoyed more share gains during the June quarter at the expense of Samsung and others. Ahead of these results, let's think about what Apple's earnings mean from a "buy the bullets" perspective. In other words, which suppliers are poised to benefit if Apple crushes shipments again or get hit if, for some reason, this leadership company in our increasingly connected society comes up short?
For Real Money Pro readers, several obvious players should spring to mind, including semiconductor suppliers such as Qualcomm (QCOM), Skyworks Solutions (SWKS) and Qorvo (QRVO). Yes, I said Qorvo, the resulting company from the merger between TriQuint Semiconductor, which was an RF semiconductor supplier to Apple, and RF Micro Devices, which was not a supplier until the most recent iPhone model added a switch module. Also buried inside the iPhone 6 are products from Avago (AVGO), including several power amplifiers per device, and InvenSense (INVN), which is supplying the iPhone 6's gyroscope and accelerometer.
Continuing with the iPhone, Broadcom (BRCM) is the touchscreen controller supplier, and NXP Semiconductor (NXPI) has several components, including the one that helps make Apple Pay, as Steve Jobs would say, simply work. Of all the chip suppliers found inside the iPhone 6, the one with the greatest number of chips is Qualcomm.
Looking at the iPad Air 2 model, right off the bat we find NXP Semiconductors has the Touch ID sensor as well as the NFC controller (just like in the iPhone 6 and 6 Plus models). Other suppliers for various components include Cirrus Logic (CRUS), Maxim Integrated (MXIM), Texas Instruments (TXN) and Broadcom. Murata has the Wi-Fi module and SK Hynix is the NAND flash supplier, while Micron Technology (MU) is the one for RAM.
Inside what will surely prove to be just the first iteration of the Apple Watch, key suppliers include STMicroelectronics (STM) for the gyroscope and accelerometer, Analog Devices (ADI) for the touchscreen controller, and Texas Instruments (TXI), which is the supplier for certain aspects of the Watch's sensor package.
One of the suppliers that we tend to take for granted is Corning (GLW), which supplies Apple with the Gorilla Glass that we swipe our fingers across every time we use our iPhones and iPads. Let's remember that larger glass-panel sizes tend to benefit Corning's revenue and prices, which mean better-than-expected iPad shipments could help Corning's results. Apple usually does not share new product details until they are formally announced, but the rumor mill has Apple introducing a larger iPad Pro in the back half of 2015. Any mention of this -- directly or indirectly -- could push GLW shares higher.
