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On Dec 6, we issued an updated research report on leading wireless chipset manufacturer Qualcomm Inc. (QCOM - Free Report) .
Year to date, the chipset manufacturer reported an impressive growth of 34.94%, compared to the Zacks categorized Wireless Equipment Market’s decline of 8.86%. This uptrend in the share price may be driven by the company’s innovative business plans such as evaluation of Unmanned Aircraft Systems (UAS) or drones on commercial 4G LTE networks, launch of two Snapdragon processors – 600E and 410E – for IoT-related applications and the launch of the world’s first 5G modem Snapdragon X50 and gigabit modem Snapdragon X16 LTE. This was followed by the upgrade of Snapdragon 820 Mobile Chipset to 821.
Positives
Qualcomm comes up with updated Snapdragon processors and applications to retain its leadership position in the global wireless baseband chipset market. The company’s recent deal to buy Netherlands-based chipset giant NXP Semiconductors (NXPI - Free Report) will help Qualcomm diversify its business model in the broader global semiconductor market. The company is actively involved in the production of chipsets for the 5G standard and is partnering with U.S. telecom behemoths Verizon Communications Inc. (VZ - Free Report) and AT&T Inc. (T - Free Report) for the same, which may propel growth in the future. Moreover, Qualcomm is widening its presence in adjacent areas, including automotive, networking, and mobile computing which bode well for long-term growth. Qualcomm’s Snapdragon processor is best known for its versatility in IoT applications. Signing of new patent license agreements with Chinese smartphone makers should boost Qualcomm’s top line by bringing in additional royalties and also solidifying its hold in China.
Latest Events
In Nov 2016, Qualcomm’s subsidiary, Qualcomm Technologies, Inc. (QTI), and Samsung Electronics Co., Ltd. entered into a strategic alliance to manufacture a premium Snapdragon processor, Qualcomm Snapdragon 835, using the latter’s 10-nanometer (nm) FinFET process technology. This launch reflects Qualcomm’s vision to expand beyond its traditional market of smartphones into the IoT space.
Following this, Qualcomm has also launched the first 5G New Radio (NR) spectrum sharing prototype system and trial platform. The telecommunications industry is presently working on 5G and Qualcomm is leaving no stone unturned to cash in on this opportunity. We believe Qualcomm’s such efforts have helped it carry a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Troubles
Qualcomm has been facing considerable challenges from low-cost chip manufacturers like MediaTek and Rockchip as well as handset manufacturers’ SoC (System on Chip) projects like Exynos by Samsung. Aggressive competition in the mobile phone chipset market may hurt Qualcomm’s profits in the future. The company is also facing severe competitive threat from its closest rival, Intel Corporation (INTC - Free Report) , which has been redesigning its chipsets for the mobile computing market. If this trend continues, Qualcomm’s profitability may be hurt in the long term.
Moreover, the European Union (EU) Competition Commission has leveled charges against the company‘s anti-competitive practices in the chip making industry. Notably, the EU had initiated a probe into whether the company has been taking advantage of its dominant position in the industry this July. Further, regulatory proceedings against Qualcomm are on the rise with the company facing antitrust cases in various countries.
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Qualcomm (QCOM) 5G Plans & Tie-Ups Bode Well, Risks Stay
On Dec 6, we issued an updated research report on leading wireless chipset manufacturer Qualcomm Inc. (QCOM - Free Report) .
Year to date, the chipset manufacturer reported an impressive growth of 34.94%, compared to the Zacks categorized Wireless Equipment Market’s decline of 8.86%. This uptrend in the share price may be driven by the company’s innovative business plans such as evaluation of Unmanned Aircraft Systems (UAS) or drones on commercial 4G LTE networks, launch of two Snapdragon processors – 600E and 410E – for IoT-related applications and the launch of the world’s first 5G modem Snapdragon X50 and gigabit modem Snapdragon X16 LTE. This was followed by the upgrade of Snapdragon 820 Mobile Chipset to 821.
Positives
Qualcomm comes up with updated Snapdragon processors and applications to retain its leadership position in the global wireless baseband chipset market. The company’s recent deal to buy Netherlands-based chipset giant NXP Semiconductors (NXPI - Free Report) will help Qualcomm diversify its business model in the broader global semiconductor market. The company is actively involved in the production of chipsets for the 5G standard and is partnering with U.S. telecom behemoths Verizon Communications Inc. (VZ - Free Report) and AT&T Inc. (T - Free Report) for the same, which may propel growth in the future. Moreover, Qualcomm is widening its presence in adjacent areas, including automotive, networking, and mobile computing which bode well for long-term growth. Qualcomm’s Snapdragon processor is best known for its versatility in IoT applications. Signing of new patent license agreements with Chinese smartphone makers should boost Qualcomm’s top line by bringing in additional royalties and also solidifying its hold in China.
Latest Events
In Nov 2016, Qualcomm’s subsidiary, Qualcomm Technologies, Inc. (QTI), and Samsung Electronics Co., Ltd. entered into a strategic alliance to manufacture a premium Snapdragon processor, Qualcomm Snapdragon 835, using the latter’s 10-nanometer (nm) FinFET process technology. This launch reflects Qualcomm’s vision to expand beyond its traditional market of smartphones into the IoT space.
Following this, Qualcomm has also launched the first 5G New Radio (NR) spectrum sharing prototype system and trial platform. The telecommunications industry is presently working on 5G and Qualcomm is leaving no stone unturned to cash in on this opportunity. We believe Qualcomm’s such efforts have helped it carry a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Troubles
Qualcomm has been facing considerable challenges from low-cost chip manufacturers like MediaTek and Rockchip as well as handset manufacturers’ SoC (System on Chip) projects like Exynos by Samsung. Aggressive competition in the mobile phone chipset market may hurt Qualcomm’s profits in the future. The company is also facing severe competitive threat from its closest rival, Intel Corporation (INTC - Free Report) , which has been redesigning its chipsets for the mobile computing market. If this trend continues, Qualcomm’s profitability may be hurt in the long term.
Moreover, the European Union (EU) Competition Commission has leveled charges against the company‘s anti-competitive practices in the chip making industry. Notably, the EU had initiated a probe into whether the company has been taking advantage of its dominant position in the industry this July. Further, regulatory proceedings against Qualcomm are on the rise with the company facing antitrust cases in various countries.
Confidential from Zacks
Beyond this Analyst Blog, would you like to see Zacks' best recommendations that are not available to the public? Our Executive VP, Steve Reitmeister, knows when key trades are about to be triggered and which of our experts has the hottest hand. Click to see them now>>