Qualcomm has committed itself to supporting all possible smartphone platforms: Android, BlackBerry, Symbian, Windows Mobile and someday it hopes the iPhone.
At Mobile World Congress on Monday, Microsoft CEO Steve Ballmer announced the latest Windows Phone, Windows Phone 7 (née Windows Mobile). Perhaps inspired by the iPhone — or perhaps Windows PCs — Microsoft will be dictating all aspects of the new devices, including the Zune-inspired user interface. (Right now, I’m watching the first “Star Trek” episode involving the Borg — an eerie coincidence?)
In conjunction with the Microsoft announcement, Quacomm announced it will be the first to support WP7 with its Snapdragon chips in the first batch of WP7 devices, in time for the Christmas selling season. The 1 GHz Snapdragon — used in the Nexus One — was welcomed as the fastest CPU available today for the new Microsoft platform.
Of its supported platforms, in the short term clearly Android and BlackBerry will be the highest volume for Qualcomm. But perhaps Qualcomm will someday displace TI and ST Micro as the main chip suppliers for Symbian handsets from Nokia, which are still the world’s market leader.
Monday, February 15, 2010
Wednesday, February 3, 2010
Predicting the past is easy
CNBC yelling head Jim Cramer trashed Qualcomm’s stock on Tuesday night, after last week’s disappointing earnings guidance for the current quarter. (This is by someone who earlier this month owned the shares).
Qualcomm attributed the problem to delayed 3G demand in developing countries while smartphone prices are falling in the developed countries. Both hurt the company’s royalties. One analyst suggests that the company also faces increased 3G chipset competition, particularly selling to Samsung.
Shares fell 14% Thursday on the news — it largest drop in almost 10 years. Most of the fall came in after hours trading Wednesday after the earning announcement.
So on Tuesday night, Cramer talked about Qualcomm using various technical analysis tools, concluding that most of the selloff was over:
This reminds me a little bit of the Apple shares that I owned in the 1980s — the shares would go up on good news and down on bad news. When Steve Jobs came back, few anticipated his ability to deliver a decade of sustained economic growth.
After the shares collapsed at the end of the telecom bubble, Qualcomm had a good run from 2002 to 2006, but has been going sideways every since. The drivers of its income growth have been are industry growth and diversification into new markets, with most of the bottom line coming from the former. However, as markets mature, competition increases. The commoditization facing its main customers (handset makers) is not going to end any time soon.
Disclosure: Several years ago, I sold all my Qualcomm shares, because I decided that writing about Qualcomm and other San Diego telecom companies was more uniquely important to my career than owning shares was to my portfolio.
Qualcomm attributed the problem to delayed 3G demand in developing countries while smartphone prices are falling in the developed countries. Both hurt the company’s royalties. One analyst suggests that the company also faces increased 3G chipset competition, particularly selling to Samsung.
Shares fell 14% Thursday on the news — it largest drop in almost 10 years. Most of the fall came in after hours trading Wednesday after the earning announcement.
So on Tuesday night, Cramer talked about Qualcomm using various technical analysis tools, concluding that most of the selloff was over:
Cramer said this doesn’t mean that Qualcomm is done going down, even as it has some 2010 catalysts such as share gains in Nokia, the increased adoption of 3G and 4G smartphones, new design wins, and expanding markets like netbooks, iPads and eReaders that use QCOM’s technology.To this, one of CNBC’s readers replied [links added by me]:
…
The bottom line: Qualcomm is guilty before its proven innocent, Cramer said. On Wall Street that means investors need not one but two quarters before anyone can ever “fall in love with Qualcomm again.”
OK, let me get this straight. Cramer tells us on January 7th of this year that Qualcomm is one of the 10 players of his "mobile Internet tsunami". On that day Qualcomm was trading at $49.15. Now, when it is south of $40.00, he's suggesting that we bail. Hummmmmm. Better yet, if you put 10K on all of the mobile internet plays outlined by Mr Kramer and posted by CNBC on Jan 7th, you would be down about $18K. Not bad for 3 weeks work!In other words, predicting the past is always easier than predicting the future.
This reminds me a little bit of the Apple shares that I owned in the 1980s — the shares would go up on good news and down on bad news. When Steve Jobs came back, few anticipated his ability to deliver a decade of sustained economic growth.
After the shares collapsed at the end of the telecom bubble, Qualcomm had a good run from 2002 to 2006, but has been going sideways every since. The drivers of its income growth have been are industry growth and diversification into new markets, with most of the bottom line coming from the former. However, as markets mature, competition increases. The commoditization facing its main customers (handset makers) is not going to end any time soon.
Disclosure: Several years ago, I sold all my Qualcomm shares, because I decided that writing about Qualcomm and other San Diego telecom companies was more uniquely important to my career than owning shares was to my portfolio.
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