Morningstar Rating

Stock Research and Analysis

by Brian Colello, CPA

Bulls Say

Qualcomm collects royalty income on virtually every 3G and 4G handset sold, as the firm holds virtually all essential patents used in 3G networks and many 4G essential patents as well.
Qualcomm is the clear market leader in wireless chips, with a dominant market share position in 4G LTE chipsets and design wins into virtually every premium handset on the market today.
Qualcomm’s Snapdragon chips, which include both the processor needed to run a phone’s operating system and baseband functionality needed to connect the phone to wireless networks, have unmatched integration today. Read more 

Bears Say

Handset pricing, and Qualcomm's licensing revenue, has suffered from time to time due to currency effects, price competition, and an unfavorable handset product mix. These headwinds may arise again.
Although most 4G phones will likely be backward-compatible with CDMA technologies used in 3G networks for years to come, a small portion of phones may emerge as 4G only and Qualcomm may earn lower royalty income on the sale of such devices.
Qualcomm's chip business could see pricing pressure and lower gross margins as competition in wireless chips intensifies. Read more 

Management

We view Qualcomm as a well-run organization and good stewards of shareholder capital. Steve Mollenkopf took over the CEO role in March after more than 20 years of service with the company and proving himself as a capable leader during his tenure running   Read more 

Profile

Qualcomm develops and licenses wireless technology and manufactures semiconductors for mobile phones. The company's key patents revolve around CDMA technology, which is   Read more 

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