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Message: Big Night for Ajit and Big Day for Apple

Posted: Monday, September 8, 2014 1:15 pm | Updated: 2:01 pm, Mon Sep 8, 2014.

By Adam Satariano and Peter Burrows/Bloomberg News

SAN FRANCISCO — When Apple Chief Executive Officer Tim Cook unveils the company's new smartphone Tuesday, he will also crown the latest winners in the iPhone economy.

For makers of screens to suppliers of power amplifiers, the iPhone serves as a trophy for companies in the behind-the-scenes business of supplying Apple with components for its devices. With $171 billion in sales in its last fiscal year — on par with the gross domestic product of Vietnam — Apple plays kingmaker by picking who provides semiconductors, graphics processors and other parts, helping to determine the fate of companies from California to China.

The most recent additions include Taiwan Semiconductor Manufacturing Co., the chip foundry that Apple is using to make processors that have long been provided by Samsung Electronics Co. and which posted record quarterly profit in July as iPhone production ramped up. GT Advanced Technologies Inc. stock has more than doubled since the company said it's supplying Apple with a sapphire material that makes glass sturdier. And NXP Semiconductor shares have risen 15 percent in the past month on reports that its technology will enable the new iPhone to be used for in-store payments.

Yet keeping Apple's business is no sure thing. Companies in one version of an iPhone or iPad can just as easily face an existential moment if dropped from the next — a lesson learned by suppliers such as Audience Inc. and TPK Holding Co.

"With Apple, the business is won and lost in huge chunks," Audience CEO Peter Santos said in an interview earlier this year. The maker of audio components saw its revenue from Apple plummet to less than 1 percent this year from 82 percent of total sales in 2010 after it was left out of the iPhone 5. "You're in a model or you're not," he said.

Apple will unveil the latest iPhones and a wearable gadget near its headquarters in Cupertino, California. The iPhones will have 4.7-inch and 5.5-inch screens and will include software that lets the handset act as a mobile wallet, while the watch-like wearable device is expected to include features for tracking health and fitness activity, people familiar with the plans have said.

Chris Gaither, a spokesman for Apple, said the company doesn't comment on suppliers. Representatives from TSMC, Samsung, GT Advanced, TPK and NXP also declined to comment.

The debut of new products will showcase the influence of landing Apple's business. At least nine publicly traded companies get more than 40 percent of their revenue from Apple, according to a supply-chain analysis compiled by Bloomberg.

Dialog Semiconductor, which makes power-management chips for the iPhone, has the most exposure, with 80 percent of its $903 million in revenue last year tied to Apple, according to the data.

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