Apple, the Kingmaker — or Company-Breaker

by Tom Taulli | September 10, 2012 8:15 am

As the world’s most valuable company, Apple (NASDAQ:AAPL[1]) has become a kingmaker. It’s the kind of power that Microsoft (NASDAQ:MSFT[2]) held during its glory days of the 1990s.

Even with Steve Jobs gone[3], Apple has continued its aggressive ways. So, expect the company to freely wield its powers.

What are some examples of this? Let’s take a look:

The Kills


According to a report in The Wall Street Journal, Apple is planning to create[4] its own Pandora-like (NYSE:P[5]) music-streaming service. On the news, P closed off by nearly 17% on Friday.

Apple thinks it can create a better service by negotiating directly with the music labels. This should allow users to play songs as many times as they want. Pandora, on the other hand, relies on the standard rates for traditional radio companies.

Of course, Apple can leverage its massive 400+ million iTunes customer base and enormous cash resources.


Apple will no longer listen to Audience (NASDAQ:ADNC[6]), which provides voice-related chips for mobile devices. Well, it won’t be used in the upcoming iPhone 5. According to Audience’s latest 10-Q, the company gets about 80% of revenues from Foxconn, which is a huge partner for Apple. As a result, Audience’s stock closed down by more than 63% on Friday.

The company came public in May with much fanfare. But now it seems that Audience is part of the living dead.

Research In Motion

Reasarch In Motion  (NASDAQ:RIMM[7]) is the pioneer of the smartphone market. But unfortunately, the company failed to keep its edge in innovation, such as with apps, touchscreens and tablets. In fact, RIM’s new models won’t hit the market until early next!

Last year, the stock was over $60. Now it’s trading at an embarrassing $7.

The Thrills


Broadcom (NASDAQ:BRCM[8]) produces semiconductors for a wide array range of applications, like networking, broadband and mobile devices. The company also has deep expertise in GPS, Bluetooth and Wi-Fi systems. These have certainly been key for Apple’s iPhones and iPads.

However, there’s even more potential. Broadcom’s core technologies are also likely to be important for next-generation devices, like smart TVs.

In 2012, Broadcom’s stock is up about 22%.


Just a few years ago, Qualcom (NASDAQ:QCOM[9]) seemed like a has-been chipmaker. But the iPhone changed everything. Since that product’s launch five years ago, the shares of Qualcomm are up an impressive 65%. The company is one of the innovators of mobile chip technologies, having creating standards like CDMA. Qualcomm also has strong technology for 4G networks.

True, it had a soft second-quarter report. But this was probably because of the fall-off of iPhone sales in anticipation of the launch of version 5.

Skyworks Solutions

Skyworks Solutions (NASDAQ:SWKS[10]) develops semiconductors that help with wireless connectivity and power management. While the company relies heavily on sales from Apple, it has been diversifying its customer base. Some of them now include Samsung and HTC.

But Wall Street has already anticipated a huge pickup from the iPhone 5 launch. Consider that Skyworks’ stock price is up a sizzling 90% for 2012.

Tom Taulli runs the InvestorPlace blog IPOPlaybook[11], a site dedicated to the hottest news and rumors about initial public offerings. He also is the author of “All About Short Selling”[12] and “All About Commodities.”[13] Follow him on Twitter at @ttaulli[14]. As of this writing, he did not own a position in any of the aforementioned securities.

  1. AAPL:
  2. MSFT:
  3. with Steve Jobs gone:
  4. planning to create:
  5. P:
  6. ADNC:
  7. RIMM:
  8. BRCM:
  9. QCOM:
  10. SWKS:
  11. IPOPlaybook:
  12. “All About Short Selling”:
  13. “All About Commodities.”:
  14. @ttaulli:

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