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Stabroek News

Stock price bonanza for iPhone parts makers
published: Tuesday | July 3, 2007


The new Apple iPhone. - AP

While most iPhone owners couldn't wait to try out their pricey new gadgets, a few raced to break them apart. The dismantled - and in some cases, permanently busted - iPhones revealed one of Apple Inc.'s closely guarded secrets: the names of the companies that supplied the chips and other electroniccomponents for the highly anticipated device.

The findings sent all but a few of the component makers' stocks higher Monday, the first day of trading since the iPhone - a combination cellphone, music player and wireless Web-browsing device - went on sale Friday evening for as much as US$600 a pop. The parts makers stand to profit handsomely if the iPhone proves popular over time.

Apple itself has set a target of selling 10 million units worldwide by 2008, gaining roughly a one per cent share of the cellphone market.

Among the beneficiaries of Apple's business and the teardown buzz were semiconductor heavyweights Intel Corp, Broadcom Corp, Texas Instruments Inc. and Infineon Technologies AG, as well as lesser-known companies such as Skyworks Solutions Inc. and Linear Technology Corp.

Standard of secrecy

Some researchers said Apple's secrecy surrounding the iPhone's component suppliers is yet another example of the Cupertino-based company's vaunted ability to keep their partners tight-lipped even when facing a media frenzy and rampant speculation.

"They're very good at it - and I think they make a point of holding their suppliers to a standard of secrecy, or you could lose the next round if you slip up," said Howard Curtis, vice-president of global services for Portelligent, a research company.

The secrecy continued Monday. Most of the component makers either didn't return phone calls or declined to comment. Much like the examinations of other much-hyped gadgets, the deconstruction of the iPhone was a mad dash to be the first to post online, with minute-by-minute updates on websites and the occasional howls of researchers who wound up destroying their iPhones.

The mad rush to deconstruct the iPhone included sites such as ThinkSecret.com and iFixit.com as well as research companies Portelligent and Semiconductor Insights. Several analysts also published the results of their own teardowns.

Based on the results, One of the biggest winners is South Korean chipmaker Samsung Electronics Co., which is making the main microprocessor used to run the phone's operating system and various applications.

Samsung, the world's largest memory chip manufacturer, is also making a type of memory called NAND flash for the iPhone.

Santa Clara, California-based Intel, the world's largest semiconductor company, is supplying another form of memory, called NOR flash, according to various research firms.

Intel's stock rose US0.53 cents, or more than two per cent, to US$24.27 in Monday trading.

Broadcom Corp, which is making a controller chip believed to be used for managing the touch-screen display, saw its stock gaining US0.52 cents, or 1.8 per cent, to US$29.77.

Texas Instruments is supplying a power-management chip. Shares of TI gained US0.43 cents, or 1.1 per cent, to US$38.06. German chip maker Infineon Technologies, which makes parts that handle cellular communications for the iPhone, saw its American Depositary Shares rise US0..50 cents, or three per cent, to US$17.03.

Skyworks, the supplier of a power amplifier used in the iPhone, saw its shares rising US0.26 cents, or 3.5 per cent, to US$7.61.

Linear rose US0.50 cents, or 1.4 per cent, to US$36.68 after the company was identified as the maker of the iPhone's battery charger chip.

But the iPhone halo didn't touch everyone Monday. Apple, for one, fell US0.78 cents, or less than a percentage point, to US$121.26.

- AP

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