Sony Corporation (ADR) (SNE), NXP Semiconductors NV (NXPI): This Chipmaker Could Benefit From the Smartwatch Trend

Sony’s use of NFC extends beyond its phones. Besides the SmartWatch 2, Sony has put NFC technology into its cameras, its TVs, and its speakers. Owners of both Xperia phones and high-end Bravia TVs can beam their phone’s screen to the TV by tapping their phone against the remote. The same technology allows music to be sent to Sony stereo systems.

Using NFC in smartwatches is an obvious decision. As both Sony Corporation (ADR) (NYSE:SNE) and Samsung’s watches must be paired with smartphones to work, NFC chips allow for easy, hassle-free pairing. As other companies, including Apple, Google and Microsoftare rumored to be prepping their own watches, expect NFC to make its way into those devices as well.

As NFC’s popularity grows, NXP benefits

NXP Semiconductors NV (NASDAQ:NXPI) won’t benefit directly from Samsung’s Galaxy Gear, as it isn’t the only company that makes NFC chips. Earlier this year, Samsung abandoned NXP Semiconductors NV (NASDAQ:NXPI)’s chips in favor of Broadcom‘s for the NFC in its Galaxy S4. The same is probably also true for its smart watch.

But Sony is an NXP Semiconductors NV (NASDAQ:NXPI) customer, and NXP remains the top supplier of NFC chips. Moreover, as a developer of the technology, NXP Semiconductors NV (NASDAQ:NXPI) has a portfolio of NFC-related patents.

Overall, the trend toward wearable computing is great for NFC technology, and therefore NXP Semiconductors NV (NASDAQ:NXPI). As companies such as Sony and Samsung look to new, connected mobile devices to grow their earnings, expect the demand for NFC technology to increase.

The article This Chipmaker Could Benefit From the Smartwatch Trend originally appeared on Fool.com and is written by Sam Mattera.

Sam Mattera has no position in any stocks mentioned. The Motley Fool recommends Apple, Google, and NXP Semiconductors . The Motley Fool owns shares of Apple, Google, and Microsoft.

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