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Trip Chowdhry of Global Equities Research stated in an e-mail to clients on Thursday that he is watching shares of
QUALCOMM, Inc.QCOM,
Cirrus Logic, Inc.CRUS and how this affects
Apple Inc.AAPLQualcomm: iPhone Market Share Gains Headwind For Snapdragon
Qualcomm reported a
better-than-expected third quarter print on Wednesday while also issuing a weak guidance and outlook.
Chowdhry noted that Qualcomm is a major supplier to Android phones with its Snapdragon processor. The analyst added that Android's market share continues to shrink as Android users are switching to iPhone devices.
Since Apple uses its own A8 chips in its iPhone devices, Qualcomm will "continue to see its growth affected" by further iPhone market share gains.
CirrusLogic: Apple Supplier Gains From iPhone Share
On the other hand, Apple's supplier, CirrusLogic is "doing extremely well" and the company's second quarter results acts as a "leading indicator" of "accelerated strength" in Apple's iPhone business.
CirrusLogic reported after Wednesday's closing bell that it earned $0.54 per share in the first quarter, exceeding the $0.43 per share analysts were looking for. Sales of $282.6 million also came in above the $260.73 million analysts were projecting.
In addition, CirrusLogic guided its second quarter revenue to a range of $290 million to $310 million, well above the $274 million analysts were projecting.
"Chip companies are a leading indicator of the Systems business," Chowdhry concluded. "First chips are manufactured and then the system is built, the system in this case is the iPhone."
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