Dec
19
2012
Qualcomm Shareholders
Qualcomm is in the lead position among Apple's market, but has become misplaced in the trundle of qualms around Apple's alleged ceasing of vendor orders.
Apple gadgets are not the only thing driving Qualcomm's wealth. Certainly the iPhone sales continue to be a key part of Qualcomm's enigma. But even so, Apple still sells iPads and iPhones.
Holiday sales increase vendor orders of Apple and should assist Qualcomm in posting of strong quarterly outcomes giving credit to the company providing the MDM9615 LTE modem, RTR8600 multimode receiver and the PM8018 Power Management IC for these gadgets.
Qualcomm has other important relationships, besides Apple, such as Samsung. Samsung is the leading seller of phones and owns 32 percent of the market with moving 55.5 million phones rising up from 22.7 percent over last year. Samsung devices incorporate Qualcomm goods. Their baseband chips permit phones to connect to the provider networks.
Snapdragon processors belong to Qualcomm, and power Nexus 4, which is Google's successful phone. They also power other leading gadgets such as Sony's Xperia Ion and Play, Nokia Lumia 920 and Galaxy 3 sales.
International sales of mobile gadgets are a lot less intense than here in the United States. Apple is more a role player in principal markets like China, where the trend is migrating toward the 3G and has been a major driver of large-scale smartphone sales. Sales of chief products from manufacturers like Samsung, Nokia and Sony in China has assisted in helping raise Qualcomm chip profits 37 percent in FY12 to 12.1 billion dollars.
Potential is there to win business that was held formerly by Texas Instruments. They abandoned any future mobile development for their OMAP processors. This means millions of Nook and Kindles are up for redesign wins next year. However, these positives appear to be lost when valuing Qualcomm shares, since they've dropped 11 percent with an 8 percent drop just last week.
This means at average estimates of 4.76 dollars per share, shareholders are only paying 12.8x forward earnings, which means a 5 year PE low. Given the market demand of vendor orders, mobile devices have tailwinds for next year, and shareholders could decide this the ideal time to choose their 2013 shares.