Morningstar Rating

Stock Research and Analysis

by Brian Colello, CPA

Bulls Say

Qualcomm collects royalty income on the substantial majority of 3G and 4G handsets sold, as it holds virtually all essential patents used in these networks.
Qualcomm is the clear market leader in wireless chips, with a dominant share 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

China's investigation into Qualcomm's licensing business and the firm's difficulties in collecting royalty revenue from Chinese handset makers adds uncertainty and risk to what is otherwise a steadily growing business.
Although most 4G phones will probably be backward-compatible with 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 licensing revenue has suffered from time to time due to currency effects, price competition, and an unfavorable handset product mix. 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 with the company, proving himself as a capable leader during his tenure running Qualcomm's   Read more 

Profile

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

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