Is Investing in Apple Suppliers Suddenly a Hot Play Again?

Is Investing in Apple Suppliers Suddenly a Hot Play Again?

Apple has announced that on Sept. 10 it'll be holding a special event in which the next iPhone is expected to be unveiled. A new iPhone can have large consequences for Apple, but it also affects its suppliers. Apple supplier Avago recently surprised investors with stronger-than-expected guidance. Initial orders of new iPhone models were cited as a key driver in the company's bullish forward outlook.

In the following video, Jamal Carnette, Eric Bleeker, and Simon Erickson look at recent Apple supplier news ahead of the iPhone 5S launch. Of particular interest is how these companies will be affected by the launch of a cheaper iPhone. That could lead to stronger unit sales for Apple and its suppliers, but Apple could also lean on suppliers to cut costs, a move that would cut back supplier margins.

Also of note is that many suppliers now trade at cheaper multiples. While Qualcomm has become the "Intel of mobile" and has seen huge growth licensing its wireless patents to smartphone companies, it trades right around the same P/E as the general market. To see a discussion on Apple suppliers such as Cirrus Logic and Broadcom ahead of the next iPhone's launch, check out the video.

If you're invested in either Apple or its suppliers, its essential to know whether or not the company has a strong future ahead of it. To help investors better understand Apple's future, The Motley Fool created a free report titled "5 Secrets to Apple's Future." Inside, you'll learn the long-term buy and sell indicators our top analysts are considering for Apple today. Simply click here now for free access.

The article Is Investing in Apple Suppliers Suddenly a Hot Play Again? originally appeared on

Eric Bleeker, CFA, owns shares of Cirrus Logic. Jamal Carnette and Simon Erickson own shares of Apple. The Motley Fool recommends Apple and owns shares of Apple, Cirrus Logic, and Qualcomm. Try any of our Foolish newsletter services free for 30 days. We Fools don't all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

Copyright © 1995 - 2013 The Motley Fool, LLC. All rights reserved. The Motley Fool has a disclosure policy.

Originally published