Ante Up With These Chipmakers For 5G Gains

5G iPhones are finally here. But don’t get carried away by the hype. Sure, Apple (AAPL) is the shiny big brand that will grab consumer attention. But as an investor, you should be smarter.

Let’s start at the beginning. Apple just recently showed off four redesigned iPhones, all supporting 5G, a wireless standard offering internet connection speeds up to 100x faster than older phones.

In many ways, Apple is late to the 5G party. Samsung and Huawei, its major competitors in the high-end smartphone market, rolled out fifth-generation wireless technology last year. Even Motorola Solutions, Inc. (MSI), LG and Google (GOOGL) have been able to trot out competent 5G devices to the midrange marketplace.

All these companies benefitted from better relationships with Qualcomm (QCOM), the world’s leading designer of 5G radios for mobile devices.

Until last year, the San Diego, Calif-based company and Apple were mired in a protracted legal dispute over royalty payments. Basically, Apple managers felt Qualcomm was charging too much. Settling the legal fracas pushed up the 5G iPhone timeline. All the new handsets revealed Tuesday will get 5G.

This change could not have come at a better time for Apple. The Cupertino, Calif.-based company has struggled to grow iPhone sales since 2015. Adding 5G wireless connectivity is going to be a major upgrade for most new iPhone buyers. But as an investor, Apple represents only a fraction of the real potential to be found in this story.

Your focus should be on Skyworks Solutions (SWKS) and Qorvo (QRVO) — the component suppliers that make the new devices speedier. Why? Because the new iPhones are just the start of something big for Skyworks and Qorvo.

Skyworks Solutions makes custom semiconductors for the radio frequency systems used by handset makers and wireless providers. Its amplifiers, switches and other components work with 5G radios to deliver better signals, routing and network capacity.

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