Growing competition in the smartphone market has taken the shine off Apple's stock. But the stocks of the "arms dealers"—those companies providing the communications chips to the handset industry—have fared better.
Apple's quarterly earnings report did little to restore investors' confidence that the company is developing the products that will allow it to compete with Samsung in the global smartphone market. Even a dividend hike and a massive stock buyback could not reverse the stock's slide—leaving it down 23 percent year to date.
(Read More:Apple Earnings Beat, Company Hikes Dividend)
"The dividend at this level is very attractive, but the erosion in the fundamentals is quite frightening," said Alex Gauna of JMP Securities.
"The smartphone market is not saturated but Apple now finds itself losing out to more diverse and better-priced (Google) Android alternatives," he told CNBC. Gauna has a "market perform" rating on the stock.
UBS's Steve Milunovich is a more optimistic, and while he's tempered his outlook he continues to rate the stock a "buy."
"When you think about it, it's amazing that the company has indicated they're going to buy back 15 percent of the (shares) outstanding and the stock is down," he said. "It tells you how worried investors are about new products coming and the gross margin decline."
Many analysts and investors have been calling for a cheaper iPhone with a larger screen that can compete with Samsung in emerging markets like China.
Milunovich wrote in a note that it's "premature to conclude that innovation is dead at Apple, which ultimately determines whether the stock works."
(Read More: Apple: Why Wall Street Got It So Wrong)
Arms Dealers
While Apple and Samsung battle it out in the global smartphone market, the trend toward continued smartphone adoption remains intact. That may continue to benefit the companies that supply chips to the entire industry.
Qualcomm, a communications chip company, estimates 3G/4G device shipments will climb about 12 percent this year to around 1.05 billion devices. The growth in emerging markets will clock in at about 18 percent, while shipments in developed markets will be about 6 percent, Qualcomm estimates.
That means industry "arms dealers" such as Qualcomm and Broadcom should benefit.
"Broadcom is in almost every cool new smartphone that's coming out," Scott McGregor, and CEO of Broadcom, told CNBC after earnings this week. "We provide the connectivity pieces and we provide things like touch and near field communications, and all kinds of other new technologies."
He added, "We want to be that one-stop shop for our customers."
Broadcom not only supplies Apple, but also Samsung. In 2012, both companies accounted for nearly 17 percent of sales, according to its annual filing. It also sells into China, counting Huawei and ZTE as customers.
"China is a great market and for us, it's been a very rapidly growing market," McGregor said. "And Broadcom is a leading provider for technology for the infrastructure in China."
(Read More: For Suppliers, Good Apple Earnings Aren't Enough)
Analysts are equally bullish on the stock. On average, analysts rate the stock a "buy," with a median price target of $40. That implies about 14 percent upside.
In a research note, Williams Financial Group analysts wrote, "In our opinion, Broadcom is one of the best positioned large-cap chip stocks to participate in long-term consumer, enterprise and service provider technological trends, but also should be a key beneficiary of any degree of global macro stabilization."
Qualcomm is another beneficiary, but there are some concerns about competition from companies like Nvidia and Mediatek, as well as declining margins stemming from its push into cheaper phones for emerging markets.
But the company should continue to see strong revenue growth as global smartphone adoption picks up, Morningstar analyst Brian Colello wrote in a note.
"We suspect that Qualcomm's design win in many of Samsung's upcoming Galaxy S4 handsets gave the company a shot in the March quarter, and will contribute to solid June revenue as well," he said.
Qualcomm supplies Apple, Samsung, and Nokia.
Colello also said the company's full-year guidance was "another strong indicator that Qualcomm is performing quite well in the highly competitive wireless chip space."
—By CNBC's Justin Menza; Follow him on Twitter @JustinMenza