Zagg shares rise on expected iPhone 5 sales boost

Zagg shares get a boost from expectations of heavy sales of iPhone 5 accessories

Associated Press

NEW YORK (AP) -- Shares of Zagg Inc., which makes accessories for cellphones and tablets, rose Thursday on expectations that it will get a significant sales boost from the release of the iPhone 5.

THE SPARK: Apple Inc. on Wednesday unveiled the new version of the iPhone, which features a thinner shape, bigger screen and a smaller power connector. The changes render obsolete many of the accessories sold for previous versions of the phone, particularly cases, which could be a sales boon to companies that can get new ones on the market quickly.

THE BIG PICTURE: The iPhone 5 goes on sale Sept. 21 in the U.S., Japan, Britain, Germany, France and four other countries.

Janney Capital markets analyst David Strasser said that based on a recent visit to Zagg's headquarters, he expects it to have compatible Zagg and iFrogz branded iPhone cases and protective skins available online and in stores on the same day to take advantage of what's expected to be very strong demand the first day of launch.

In addition to the sales stemming from the change in the iPhone's shape, Strasser noted that the Salt Lake City company also should get a boost from the earlier announcement of the new phone. Last year, Apple unveiled the iPhone 4S, which was compatible with most iPhone 4 products, on Oct. 4, pushing its launch into the fourth quarter.

Meanwhile, numerous other accessory makers say they will have new cases, protective screens and other accessories ready to go when the new phones go on sale or shortly after.

THE OPINION: "Zagg did its home work on the new iPhone 5 form factor, and we believe Zagg got it right," Strasser wrote in his Tuesday note to investors. He maintained a "Neutral" rating on the stock, primarily because of management changes at the company.

The analyst said that preorders for the company's screen protectors and cases have been very strong so far. He added that since the company's invisibleSHIELD screen protectors are made in the U.S., the company will be able to refill retailer shelves quickly.

THE SHARES: Up 48 cents, or 5.8 percent, to $8.75 in afternoon trading, peaking at $8.77. Over the past 52 weeks, the company's shares have traded between $6.40 and $14.10.

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