Stifel's Cody G. Acree and Patrick Newton out saying that based on their checks Skyworks' (NASDAQ:SWKS) business appears to be progressing in line with the co's guidance and more convinced of Skyworks' opportunities in 2007 with strong potential to deliver second-half revenue and earnings upside.
Most significantly, firm's channel work has also led them to conclude that Skyworks has been selected to supply the Front-End Module to Apple's new iPhone, which should begin contributing to revenue during the first half.
Firm is highly encouraged by what they believe is an Apple win for many reasons. First, at about $2 per FEM this new customer could contribute to meaningful upside.
Second, they believe Apple's decision to use Skyworks over competing module suppliers is a material technology endorsement that should be acknowledged by investors.
Notablecalls: That's what I call research! Nice work guys! It probably won't work as a trade today as SWKS is too heavily traded, but should provide upside to the stock in the near-term as the news is getting digested by the street. If every iPhone has SWKS FEM, it should provide nice upside to 2007 ests even with low mkt share assumptions.