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3 Stocks in the Spotlight Post Apple's iPhone X Event

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Apple Inc’s (AAPL - Free Report) much awaited event on Sep 12, 2017 turned out to be as expected. There was hardly any surprise element, thanks to the massive leaks just a couple of days before the event. However, Apple’s much awaited mega tenth anniversary iPhone X was widely appreciated.

The New iPhone X

Though the $999 price tag has been considered by many as a sales deterrent, we believe Apple is likely to see a boost in its revenues with the new iPhone. The iPhone X is completely revamped. It now boasts end-to-end curved OLED display with a facial recognition technology that unlocks the phone as well as helps to make secure payments via Apple Pay.

The Face ID technology is powered by the TrueDepth camera that is equipped witha flood illuminator, infrared camera, dot projector, front camera and ambient light sensors. Machine learning enables Face ID to adjust with physical changes in facial appearance over time.

Computer and Technology Sector 5YR % Return

Computer and Technology Sector 5YR % Return

It supports wireless charging and is resistant to microscopic dust and water. It also has the A11 bionic chip. Apple added that with the new A11 bionic chip, augmented reality games and apps “reach a new level of fluidity and realism.” The Home button has been done away with. Users will just have to swipe up to access the home screen.

Pre-orders begin Oct 27 and the phones will be available from Nov 3.

3 Stocks in Spotlight Post Apple Event

With iPhone X launch, Apple isn’t the only company grabbing headlines. The much awaited phone like always has put the spotlight on its suppliers. However, another name that was mentioned at the event, much to everyone’s surprise, was Snap Inc. (SNAP - Free Report) . Snap is the parent company of the popular social media platform, Snapchat.

While demonstrating Face ID powered by True Depth camera, which allows Animoji to function, Apple announced that it was working with Snap to create hyper realistic filters that track one’s facial movements and help imprint the same on an emojis. Apple also spoke about its intention to strengthen augmented technology efforts in its iMessage application.

Notably, Snapchat’s acquisition of Looksery helped it popularize AR through its lenses and filters. Lenses are powered by AR technology help to superimpose graphics on to the face using the phone’s front camera.

Reportedly, Snapchat lenses for Animoji are advanced because these are “personalized for unique facial contours and can reflect and react to ambient light in the room.” This feature has been copied by many social media platforms. Many analysts observe that Apple’s push to take AR mainstream will help Snapchat to bring AR to Maps and other features. This is likely to increase the popularity of the social media platform and help it fend off competition from its rival, Instagram.

Let’s move to the next company, Intel Corp (INTC - Free Report) . Undoubtedly, the biggest beneficiary of the Apple-QUALCOMM fallout is Intel. Apple started to procure cellular LTE (long-term evolution) modems XMM 7480 for iPhone8, iPhone 8 Plus and iPhone X. Last year, it had started using XMM 7360 cellular modems in addition to Qualcomm’s Snapdragon X12 LTE modem for its iPhone 7 series.

Now, XMM 7480 is the fourth generation LTE modem with speed of up to 600 Mbps download and 150 Mbps upload. It also supports 4x Carrier Aggregation.

The latest XMM 7480 modem chips use about 15% less power than its predecessor. Apple’s contract win is a huge thing for Intel given that its modems are widely considered to be relatively “inferior” compared to Qualcomm’s Snapdragon variety. 

In January this year, Apple and QUALCOMM fought over royalty payments. As a result, Intel is expected to have gained the majority of modem orders with many media reports claiming the percentage to be as high as 50% of the entire baseband order. There are various claims that Apple might move completely to Intel for its modem needs for iPhones.

Then there is Corning Inc. (GLW - Free Report) . Corning has been a leading innovator in the glass substrate industry. The tough Gorilla Glass, now widely used in smartphones, was developed by Corning. Apple and Corning share solid decade old collaboration.

Corning put the Gorilla Glass on the first iPhone in 2007 and has been the biggest supplier of glasses for both iPad and iPhones. Apple’s COO Jeff Williams was quoted as saying, “This partnership started 10 years ago with the very first iPhone, and today every customer that buys an iPhone or iPad anywhere in the world touches glass that was developed in America.”

At its event, Apple stated that all three of the latest edition phones have an all-glass design. The glass has been made more durable by putting a steel base for proper reinforcement.

One analyst observes that though Apple has talked about this “new kind of glass” but has refrained from mentioning the name. He adds that there are high chances that this could be Gorilla Glass 5. Glass 5 reportedly is an extremely toughened glass that can withstand “drops up to 1.6 meters up to 80% of the time.” Just like Apple, its supplier also remains tightlipped. But given Apple-Corning’s long partnership, it is highly unlikely that Apple made an exception for iPhone X, adds the analyst.

Apple along with the other three stocks carry a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

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