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Avoid this Supplier as Apple Inc. (AAPL) Sales Decline

NXP still faces risks. QUALCOMM, Inc. (NASDAQ:QCOM) entered the NFC market recently, and the Snapdragon S4 processor maker could release an NFC chip in mass volume for device makers by the third quarter of this year. Integrating the NFC chip would give QUALCOMM, Inc. (NASDAQ:QCOM) and edge. The chip giant also has a large market share for smartphone processors, and Qualcomm could leverage that strength to win sales for NFC chips.

Foolish Bottom Line

When a company relies too heavily for sales on a single customer, that is a red flag. This means that the companies discussed, such as NXP, Skyworks, and OmniVision are good investing ideas. Negative news around Apple could pull down these companies, creating a buying opportunity. One company to avoid is Cirrus Logic. Cirrus Logic relies too heavily on Apple for its fortunes, whilst the other suppliers have a broader customer base. As sales slow for Apple, due to expectations for an iPhone 5 refresh, Cirrus Logic shares will be hurt the most.

The article Avoid this Supplier as Apple Sales Decline originally appeared on and is written by Chris Lau.

Chris Lau has no position in any stocks mentioned. The Motley Fool recommends NXP Semiconductors. The Motley Fool owns shares of Cirrus Logic. Chris is a member of The Motley Fool Blog Network — entries represent the personal opinion of the blogger and are not formally edited.

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