3 Companies That Could Suffer Because of Apple's Latest iPhone
Apple isn't the only company affected by its newest iPhones. In addition to rolling out two new phones -- a first for Apple -- the company has also taken bold steps that could weigh on shares of other companies.
I'm not talking about major competitors like Samsung, BlackBerry or Nokia, but rather smaller companies tied to specific products or technologies.
Apple continues to shun NFC in favor of alternatives
Android OEMs like Sony and Samsung have been big proponents of NFC technology, including it in their high-end smartphones and tablets. Samsung has actually made NFC features a focal point of its advertising strategy, while Sony has included it in nearly all of its electronics -- from TVs to headphones to speakers.
But Apple has held off, and with its latest iPhone it has gone further -- pushing alternative technologies that could be a competitive threat to NFC.
Rather than using NFC to transfer files like Samsung, Apple has included AirDrop in iOS 7 - instead of touching their phones together, iPhone owners can transfer files over WiFi. iOS 7 also includes iBeacon -- a technology that allows small data packets to be sent over Bluetooth connections, and could form the basis of a mobile payments system.
Chipmaker NXP Semiconductors has long been regarded as a major play on NFC technology. Although it isn't the only company to make NFC chips, it's a major producer and co-developer of the technology; it holds a portfolio of NFC-related patents.
iTunes Radio is a Pandora clone
In Pandora's case, it isn't the fact that Apple has decided to ignore the company's product, but rather to copy it. iTunes Radio, included in iOS 7, is more or a less a clone of Pandora's Internet radio service.
Given that iTunes Radio is already installed on the phone, works with Siri, and is a part of the larger iTunes application, it's likely that many Pandora listeners could ultimate defect.
That defection could be significant -- in fact, I would estimate that as much of half of Pandora's listening base could abandon the service. Pandora doesn't offer an exact breakdown of its listeners' mobile operating systems, but the majority are likely coming from iOS.
- In the first quarter, 79% of Pandora's listeners were using a mobile device
- Most of Pandora's listeners are in the US
- iOS has about 40% of the smartphone market in the US
- iPhone owners are more engaged, using more apps more often
No doubt, iPhone owners represent a big chunk of Pandora's listeners. If they decide to use iTunes Radio instead of Pandora, things could get ugly for the Internet radio giant.
Apple is finally starting to make its own cases
Like Pandora, Zagg is another company susceptible to competition from Apple itself. Admittedly, Zagg makes numerous mobile accessories, from earbuds to cables and gaming controllers, but company is a major producer of cases -- specifically iPhone and iPad cases.
Zagg, through its subsidiary iFrogz, sells dozens of different cases for Apple's devices. That could be problematic in the future.
Alongside the iPhone 5C, Apple introduced new cases for the iPhone made by Apple itself. Personally, I find them difficult on the eyes (readers can judge for themselves), and given the choice, I would pick a Zagg case over an Apple one any day.
But the larger point is that Apple now appears willing to make iPhone accessories in-house. If this proves to be a long-term strategic decision, companies that rely on the sale of iPhone accessories -- like Zagg -- could find life just a bit more difficult going forward.
The iPhone is bigger than Apple itself
It's a testament to Apple's dominance just how big the iPhone has become. It's more than just the device -- the iPhone supports an entire economy, from apps to accessories and suppliers. What Apple does (or doesn't do) with its iPhone can have enormous effects on that economy, and the changes it's made to the latest iPhone are no different.
In this case, NXP Semiconductors, Pandora and Zagg are all onthe hook. With Apple shunning NFC, pushing iTunes Radio and making its own cases, all three companies could struggle.
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The article 3 Companies That Could Suffer Because of Apple's Latest iPhone originally appeared on Fool.com.Sam Mattera has no position in any stocks mentioned. The Motley Fool recommends Apple, NXP Semiconductors , and Pandora Media. The Motley Fool owns shares of Apple. 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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