1 Company That Stands Apart in Wearable Components

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Like smartphones before them, wearable tech products have investors looking under the hood to find the component plays. Foolish tech analyst Evan Niu identifies a company that may stand to gain whether smartphones or dedicated fitness devices come out on top in the wearables war.

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A full transcript follows the video.

Eric Bleeker: Hey Fools, I'm Eric Bleeker from The Motley Fool, coming at you from the CES floor. I'm here with Evan Niu, a technology analyst at the company. We've talked previously about some wearable plays, especially around fitness tech. We are in the fitness area; there are hundreds of companies. It's a booming area.

One question is, are you going to have a Fitbit in your pocket, or potentially something like the coprocessor in the newest iPhone doing the work? Are people going to want a separate device for this? You have one company that could maybe benefit from both sides. Tell us a little about it.

Evan Niu: We were talking a little bit about NXP Semiconductor . I think, more broadly speaking, if we looked at smartphone component investing it was a huge story that everyone loved to get in on.

I think the natural next thing to think about for investors is, can we do a similar thing with wearables? Is there a component play to get in on the wearables thing? I think that there are some good ways and some bad ways.

Certainly, a lot of things that are driving these things are accelerometers, gyroscopes made by -- like we just talked about, NXP, STM , all these other players -- but I think those are types of commoditized products that might be high unit volumes, but also low margins.

But we look at the M7 coprocessor from Apple; it's actually an NXP Semiconductor chip that Apple has rebranded. That's a very much behind the scenes play that I think NXP could definitely benefit from, as some of these wearable things get integrated into devices like the iPhone ... if Apple does an iWatch maybe that will have an M7 too.

I think NXP might, very much for the Apple side of it, be positioned to ride Apple on the wearables side of things.

Bleeker: Great. There you have it, investors. Lots of opportunity here, but watch out for commoditization and do your research. NXP may be a good place to start that out.

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The article 1 Company That Stands Apart in Wearable Components originally appeared on Fool.com.

Eric Bleeker, CFA has no position in any stocks mentioned. Evan Niu, CFA has no position in any stocks mentioned. The Motley Fool recommends NXP Semiconductors. Try any of our Foolish newsletter services free for 30 days. We Fools may not 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.

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