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When Apple Inc. (Nasdaq: AAPL) announces new products or updates to existing products, it sends shock waves out into the tech world.
Apple's ability to alter the fate of other tech companies was on full display at the June 11 WWDC 2012 keynote.
Apple's enormous revenue – about $160 billion annually and rising – means generous and steady profits for its partners and suppliers. A new deal with Apple often gives a tech company's stock a nice pop.
But it also explains why tech companies dread losing a relationship with Apple.
Investors that may not want to buy Apple often use the Cupertino, CA company's partners as proxies. It can be a profitable strategy, but a risky one – Apple often drops partners with little or no warning.
Apple's announcements at WWDC created a fresh set of winners and losers. Let's have a look at what happened:
Who Apple (Nasdaq: AAPL) Smiled on at WWDC
- TomTom NV: Perhaps the biggest winner at WWDC was Netherlands-based TomTom NV (PINK: TMOAF). TomTom makes personal navigation devices (PNDs). Apple announced that it will use TomTom's data in its new Maps app. TomTom followed up with a statement that its licensing deal with Apple is global. Investors promptly pushed the stock up 16% on the Amsterdam exchange. This partnership should have some staying power, as TomTom was on board with an app for the iPhone as early as 2009, and was given a slot in that year's WWDC keynote presentation.
- Social Media Winners: Recognizing the growth and importance of social media, Apple continued its trend toward integrating such services into its operating systems. Apple said Facebook Inc. (Nasdaq: FB) will join Twitter in iOS when the new version iOS 6 is released later this year. This is probably the best news for FB since its disastrous IPO in May. It means not only that Facebook will be easier to use on iPhones and iPads, but that some of the data that people share on the social network will be integrated into Apple's apps, such as the calendar. Such integration on the leading mobile platform could help Facebook increase the amount of time users spend on the site, which has slipped lately.
One other social media winner is restaurant location and review company Yelp Inc. (NYSE: YELP). Already used by Siri, Apple's voice-activated assistant, Yelp is also destined for better integration with iOS 6. At WWDC Apple said Yelp would be more closely tied into its new home-grown Maps app as well as with Siri. In response YELP shot up about 25%.
- Hardware Winners: The headline announcement at WWDC had to do with Apple's MacBook laptop line. Each model got a CPU upgrade based on Intel Corp.'s (Nasdaq: INTC) new Ivy Bridge chips, good news for the venerable chipmaker. But a bigger winner here is Nvidia Corp. (Nasdaq: NVDA), which Apple chose to provide the graphics chips for its new high-end MacBook Pros. Landing the deal with Apple should help Nvidia preserve market share in a business that's been under pressure from the integrated graphics solutions offered by Intel, as well as gains by rival Advanced Micro Devices Inc. (NYSE: AMD).
Left Behind By Apple at WWDC
- Google: Although it's hard to say how much it will hurt Google Inc. (Nasdaq: GOOG), the search giant took damage on several fronts at WWDC. First, Apple's Maps app replaces the Google Maps app in iOS 6, although that's hardly the worst of it. What's more troublesome is that Apple keeps adding new sources of data to Siri – sources that are not Google. The more capable Siri gets, the less iPhone owners will use Google. And then there's Apple's Passbook app. Passbook consolidates electronic tickets to movies and sporting events, airline passes, and merchant payment cards, making mobile transactions much easier. That's a direct threat to Google Wallet, which has struggled to get traction in the marketplace since its launch about a year ago. The battle for dominance in mobile transactions will be fierce, and Apple just seized the high ground.
- Personal Navigation Device Companies: To be specific, this means PND companies not named TomTom. With TomTom's data, Apple's Maps app can do turn-by-turn navigation (assisted by Siri.) What's more, Apple announced deals with nine major automakers to include a Siri "Eyes Free" button on their steering wheels. That means people no longer need a standalone GPS device. In the wake of WWDC the stocks of Garmin Ltd. (Nasdaq: GRMN) and Harman International Industries Inc. (NYSE: HAR) both fell about 10%. The news also wasn't great for Ford Motor Co. (NYSE: F), which was not on Apple's list of auto partners and uses a proprietary vehicle navigation system.
- Advanced Micro Devices: AMD is the loser in Apple's switch to Nvidia graphics chips for its MacBooks. AMD, of course, was the previous supplier. AMD has been nipping at Nvidia's heels in the market to supply PC graphics, so this setback will slow that momentum. Graphics is an area that bears watching, however, as Apple has switched back and forth between suppliers often over the years.
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