Apple Suppliers Attract Investors Ahead of iPhone 6 Release

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With two larger-screen iPhone 6 models rumored to be released this fall, it is no surprise that many analysts are raising their price targets on Apple (NASDAQ:AAPL) shares in anticipation of the increased revenue. The iPhone represented 57 percent of the company’s revenue in the first quarter of this calendar year, and the highly anticipated screen size upgrades could make the iPhone 6 launch the biggest smartphone launch in Apple’s history.

While the most iPhones Apple has ever sold in a quarter were 51 million units during the fourth quarter of 2013, analysts at the Taiwan-based Topology Research Institute are predicting that Apple will sell as many as 80 million iPhone 6 units in 2014 alone, reports the Economic Daily News.

However, Apple isn’t the only tech company that will benefit from the expected success of the iPhone 6. Reuters reports that many investors are also rushing to invest in Apple’s Taiwan-based suppliers. Besides receiving a direct benefit from Apple’s iPhone sales by supplying the Cupertino, California-based company with components or by assembling devices, suppliers also see a spillover benefit when other smartphone makers try to incorporate identical or similar components that are featured in the latest iPhones.

According to the chief investment officer of Fuh Hwa Securities Investment Trust, John Chiu, Apple’s suppliers also have a size advantage that benefits investors looking for a quick return. “From foreign investors’ point of view, Apple is a very big stock, and that limits the upside potential for earnings growth and share prices,” Chiu said to Reuters. “Relatively speaking, Apple component makers are smaller and their growth potential is bigger. They are more likely to get a re-rating on their stock prices if Apple’s new products are successful.”