LONDON (ShareCast) - The launch of Apple’s two new smartphone models may not have boosted the US group’s own share price on Wednesday, but it did have a positive effect on two tech stocks in the UK, namely ARM Holdings and Imagination Technologies.

Apple was trading 5.34% down at $468.24 in morning trade in New York after last night’s unveiling of the iPhone 5S: an upgraded version of the iPhone 5 which features a faster chip, better camera and fingerprint scanner. It also revealed its new iPhone 5C: a cheaper, more colourful, plastic version of the gadget aimed at emerging markets.

US markets however gave a cool reaction to the release, with analysts disappointed about the pricing of the iPhone 5C. Credit Suisse, UBS and Bank of America Merrill Lynch (BofA) all downgraded their ratings for the stock today, with the latter saying that prices of the lower-end gadget “will be too high to increase penetration in emerging markets”.

BofA also labelled it “another ‘evolutionary but not revolutionary’ iPhone product launch”.

Despite the disappointment, FTSE 100-listed ARM Holdings jumped 3.77% to 976.5p by the afternoon following the launch by Apple, a key customer, was seen as an opportunity to boost profits at the UK chipmaker.

“The launch of Apple’s new range of iPhones yesterday has helped shares in ARM […] as they announced the new 64-bit A7 processor found in the new iPhone 5s carries a higher royalty rate,” according to Lee Mumford at Spreadex.

BofA predicts that ARM could derive around $1 per iPhone 5S, 11 cents higher than the $0.89 it receives per iPhone 5.

Apple believes that the 5S will be two times as fast as the iPhone 5 while having a similar battery life.

Analysts at Deutsche Bank said: “We see this as largely driven by ARM v8 64 bit used in the A7 and view the improvements as clear evidence of ARM's architecture being capable to move up the performance curve while retaining its low power envelope.”

The German bank said it had expected the first 64-bit mobile processor launches in late 2014 so it sees “Apple’s earlier-than-expected adoption as a strong positive for the ARM investment case”.

Mobile devices account for about 70% of ARM’s revenues and some analysts have speculated the iPhone’s new 64-bit technology may help the group break into the markets for servers and desktops, where Intel is currently dominant.

FTSE 250 Imagination Tech, which also makes components for Apple’s gadgets, was also making gains in London. The stock was up 0.9% at 304.73p.

Others in the UK-listed tech sector were also in demand, including CSR, Wolfson Electronics, Cenkos Securities, Filtronic and Nanoco.



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BC

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