5 Stocks to Boom on iPhone 5 Release

by Anthony John Agnello | September 22, 2011 1:00 pm

Apple iPhoneApple (NASDAQ:AAPL[1]) CEO Tim Cook is going to go on stage on Oct. 4 and finally, after nearly a year of anticipation, announce the iPhone 5[2]. He also likely will announce the iPhone 4S[3], a smaller, cheaper version of the current best-selling model of smartphone sold by the Cupertino, Calif.-based company.

Consumers already rabid for the company’s portable devices will have even more to celebrate as their lust for the latest and greatest device finally will be sated. And Apple shareholders have already seen the stock hit an all-time high in September. The iPhone 5 should push shares even closer to that vaunted $500 price point[4].

The iPhone 5 release also brings good news for telecoms Verizon (NYSE:VZ[5]), AT&T (NYSE:T[6]) and even Sprint (NYSE:S[7]), while retailers like Best Buy (NYSE:BBY[8]), Wal-Mart (NYSE:WMT[9]) and Target (NYSE:TGT[10]) bask in the glow of fresh sales. But these aren’t the only publicly traded companies that stand to benefit from the new iPhone’s release.

Here are five stocks that can expect a boom when the iPhone 5 hits shelves:

Compare Brokers[11]


Adobe ADBEThe iPhone’s success has been a thorn in Adobe’s (NASDAQ:ADBE[12]) side for years thanks to Apple’s staunch refusal to properly support the company’s media platform Flash. For those unfamiliar, Flash is the application used for any number of things on the web, from video on Google’s (NASDAQ:GOOG[13]) YouTube to the advertisements cluttering the average web page.

Adobe finally found a way to work around Apple’s restrictions to get Flash on the iPhone though[14], meaning companies making products with Flash will have a fresh new audience when the iPhone 5 releases. Adobe also has released a number of products for iOS in 2011, including Digital Publishing Suite support for Apple’s Newsstand[15] and a bevy of art tools in Adobe Creative Suite 5.5[16]. To say investors are cool on Adobe[17] would be an understatement, but the iPhone 5 should bear fruit for the embattled company.

Compare Brokers[11]


eBayeBay (NASDAQ:EBAY[18]) already enjoys a robust mobile business, so the release of one more popular smartphone should only provide icing on the cake. But eBay has one new project that should especially benefit from the popularity of Apple’s new device.

The company plans to open a new mobile payments program through PayPal this fall, allowing users to pay for goods using their mobile phone number and a pin number. Google Wallet[19] is the mobile payment service getting press now, but that service is restricted to a single type of phone on Sprint’s network at the moment. EBay and Paypal’s service won’t be restricted by a phone’s technology, meaning the possible millions of iPhone 5 users this fall likely will find it the mobile payment option of choice.

Compare Brokers[11]

Electronic Arts

Electronic Arts ERTS[20]Of the many publicly traded video game publishers working on Apple’s portable devices, few have enjoyed the success Electronic Arts (NASDAQ:ERTS[21]) has. During the holiday 2010 season — a quarter when Apple sold nearly 9 million iPhones — Electronic Arts’ games accounted for 14 of the top 25 best-selling games in Apple’s App Store[22]. EA’s recent acquisition, game maker PopCap[23], also has a long history of success on Apple’s portables.

EA shares are down from mid-summer highs, but the flood of sales on digital platforms, particularly Apple’s new phone, should help the company report Q4 earnings that will turn things around.

Compare Brokers[11]

China Mobile/China Telecom

China Mobile China Telecom CHA CHLShares in China’s second- and third-place telecoms are trading below their respective 52-week highs. The introduction of the iPhone 5 into both networks should give both China Mobile (NYSE:CHL[24]) and China Telecom (NYSE:CHA[25]) a major influx of new paying subscribers.

Brian White of Ticonderoga Securities said on Wednesday that he believes China’s 3G smartphone subscribership will grow from 93.8 million in September to 125 million[26] by January. With the iPhone 5 — believed to be a 3G device — supported by all of China’s major telecoms, Apple should play a key part in reaching those lofty subscriber heights.

As of this writing, Anthony John Agnello did not own a position in any of the stocks named here. Follow him on Twitter at @ajohnagnello[27] and become a fan of InvestorPlace on Facebook[28].

  1. AAPL: http://studio-5.financialcontent.com/investplace/quote?Symbol=AAPL
  2. announce the iPhone 5: https://investorplace.com/2011/09/apple-rumors-iphone-5-china-mobile-china-telecom-kazaa/
  3. iPhone 4S: https://investorplace.com/2011/08/tuesday-apple-rumors-still-rollin-in-dough/
  4. even closer to that vaunted $500 price point: https://investorplace.com/2011/09/apple-rumors-aapl-420-500-iphone-5-asci-survey/
  5. VZ: http://studio-5.financialcontent.com/investplace/quote?Symbol=VZ
  6. T: http://studio-5.financialcontent.com/investplace/quote?Symbol=T
  7. S: http://studio-5.financialcontent.com/investplace/quote?Symbol=S
  8. BBY: http://studio-5.financialcontent.com/investplace/quote?Symbol=BBY
  9. WMT: http://studio-5.financialcontent.com/investplace/quote?Symbol=WMT
  10. TGT: http://studio-5.financialcontent.com/investplace/quote?Symbol=TGT
  11. Compare Brokers: https://investorplace.com/options-trading/broker-center/
  12. ADBE: http://studio-5.financialcontent.com/investplace/quote?Symbol=ADBE
  13. GOOG: http://studio-5.financialcontent.com/investplace/quote?Symbol=GOOG
  14. work around Apple’s restrictions to get Flash on the iPhone though: https://investorplace.com/2011/09/apple-rumors-adobe-flash-iphone-htc/
  15. Digital Publishing Suite support for Apple’s Newsstand: https://investorplace.com/2011/09/apple-rumors-adobe-newsstand/
  16. Adobe Creative Suite 5.5: https://investorplace.com/2011/04/mondays-apple-aapl-rumors-adobe-adbecozies-up-to-ipad/
  17. investors are cool on Adobe: https://investorplace.com/2011/09/adobe-systems-adbe-earnings-report-apple/
  18. EBAY: http://studio-5.financialcontent.com/investplace/quote?Symbol=EBAY
  19. Google Wallet: https://investorplace.com/2011/09/google-wallet-paypal-mobile-payment-sprint-iphone/
  20. [Image]: https://investorplace.com/wp-content/uploads/2010/08/ElectronicArtsLogo-e1285772066317.jpg
  21. ERTS: http://studio-5.financialcontent.com/investplace/quote?Symbol=ERTS
  22. 14 of the top 25 best-selling games in Apple’s App Store: https://investorplace.com/2011/03/3-stocks-to-watch-in-mobile-and-social-gaming/
  23. PopCap: https://investorplace.com/2011/07/popcap-electronic-arts-erts/
  24. CHL: http://studio-5.financialcontent.com/investplace/quote?Symbol=CHL
  25. CHA: http://studio-5.financialcontent.com/investplace/quote?Symbol=CHA
  26. will grow from 93.8 million in September to 125 million: https://investorplace.com/2011/09/apple-rumors-iphone-5-china-mobile-china-telecom-kazaa/
  27. @ajohnagnello: http://twitter.com/#%21/ajohnagnello
  28. InvestorPlace on Facebook: http://www.facebook.com/pages/InvestorPlace/178906405484848

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