QUALCOMM

Analysis of Qualcomm share price

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The Qualcomm share is one of the American securities on which it is possible to speculate online from a simple trading platform or through your bank. But to succeed in implementing an effective analysis on this stock market share, you must of course know perfectly this company, its activities, its competitors and possible partners as well as know how to carry out your fundamental analyzes by studying the strengths and weaknesses of this group and by detecting the challenges for the future that will arise in the months and years to come. This is precisely what we suggest you discover in this article with the help of some essential data.

Elements that can influence the price of this asset:

Analysis N°1

Firstly, to evaluate the movements in the profitability of Qualcomm it is necessary to follow movements in its subscriber base. This has actually been experiencing full growth over the last few years.

Analysis N°2

We would also keep a watchful eye on acquisitions by the group related to graphic resources and mobile multimedia that could increase this company’s turnover.

Analysis N°3

The mobile telephone sector, particularly the increase of the 5G technology worldwide is of course a favoured indicator for this stock market asset.

Analysis N°4

Qualcomm also seeks to position itself in the mobile banking sector. It is therefore important to closely follow movements in this sector.

Analysis N°5

On the other hand, certain setbacks such as the unfavourable change in the intellectual properties policies of the SDGs may lead to a reduction in the growth possibilities for Qualcomm and should therefore be followed closely.

Analysis N°6

We would of course also keep an eye on the global economic conditions.

Analysis N°7

Finally, any litigation relating to a patent used by Qualcomm could have significant consequences on the profitability of this company and these events should therefore not be taken lightly.

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General presentation of Qualcomm

The American company Qualcomm, based in San Diego, California, is a company specialised in the design, development and sale of software and CDMA systems worldwide. To better understand the range of activities of this technological group we can separate the products sold by Qualcomm into two sub-categories according to the turnover generated by each as follows:

  • Firstly, the sale of communications systems represents the major part of the company’s activities and in fact generates 74% of the total turnover of Qualcomm. This concerns mainly the CDMA systems such as integrated circuits, software and voice transmission and data systems as well as software in the multimedia sector. Also in this sector we find wireless communications and internet access systems with products mainly destined for the transmission of data, satellite communications and decryption.      
  • The 25.3% remainder of Qualcomm’s turnover is generated by the sale of licenses and permits for manufacturers that use Qualcomm technologies such as CDMA in the creation of their products. 

From a geographical point of view, the activities of the Qualcomm Group are spread around the world. In fact, although this group is actually based in the United States, this company only achieves 2.3% of its turnover there. China is in fact one of the major markets of this company with 65.4% of its turnover and North Korea is in second position with 15.9% with the rest of the world providing 16.4% of its turnover.

Analysis of Qualcomm share price
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The major competitors of Qualcomm

The American Group Qualcomm is actually one of the international leaders in its activity sector. However this is not the only company trying to increase its share of the profitable IT software and equipment sector. In fact, Qualcomm has to face significant competition worldwide from major groups and companies including the following, classified according to turnover.      

Intel Corporation 

Also based in the USA, this company is actually the leader in this market notably due to its semi-conductors.        

The Korean group Samsung 

This group is in second position of this classification and is also the world leader in high tech industrials.

TSMC

In third position we find the Chinese group, TSMC, notably specialised in the graphics chips sector.

Broadcom

Another American company is in fifth position in this global classification, this is the Broadcom Company.

Hynix

The South Korea based company Hynix is in sixth position.

Micron

Then comes the Micron Group which holds seventh position in this list.

Texas Instruments

In eighth position is the American group Texas Instruments.

Toshiba

In ninth position we find the Japanese company Toshiba.      

NXP

Previously a Philips subsidiary based in the Netherlands, NXP is in tenth position and the last in this classification.


The major partners of Qualcomm

In order to position itself among the leaders of this activity sector, the Qualcomm Group focuses above all on technological and innovative developments as well as counting on its ability to implement solid and beneficial alliances and partnerships with other companies around the world. Here then are some examples of recent partnerships that the group has implemented.       

Apple

Since 2011 for example Qualcomm has been in a particularly beneficial commercial alliance with the Apple Group. It supplies the latter with all the microchips that are used on the iPhone mobile telephones. However, certain rumours hint at the possibility that this long term partnership may be reaching its end, Apple will probably turn to Intel in this case for the creation of its next mobile phone series.    

Blackberry

Later, in 2017, Qualcomm decided to collaborate with the mobile telephone manufacturer Blackberry. The Blackberry Group had recently developed a virtual platform that enabled different operating systems to be used simultaneously which was named QNX Hypervisor and they decided to sign an agreement with Qualcomm to use their microchips in the design of its virtual interior control and electronic gateway systems as well as on its infotainment platforms.                

Samsung

Finally, in 2018, the Qualcomm group announced the renewal of its long term partnership with the Samsung mobile telephone manufacturer. This partnership, renewed for a non specified period which is undoubtedly for a number of years, will notably enable the company to concentrate on 5G technologies in the development of autonomous automobiles which is of course seen as one of the most promising sectors for the next few years. The two companies previously and notably collaborated on the development of the high end mobile microchips, Snapdragon 835 and Snapdragon 845.

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The factors in favour of a rise in the Qualcomm share price:
  • One of the main strengths of the Qualcomm group is, of course, its significant investment in research and development. This allows the group to benefit from a solid market base with companies that are constantly looking for more efficient or innovative IT components.
  • Qualcomm can also rely on the durability of its contracts, which are generally signed on a long-term basis with major players in the technology fields and around the world. This, of course, gives Qualcomm excellent visibility into its results.
  • The American group also generates a lot of its revenue from the patents it holds. To date, the company holds more than 12,600 patents as well as pending patent applications relating to the latest technologies developed by the company.
  • Qualcomm also benefits from a certain ability to diversify its target customers and the format of its products. As a result, it effectively protects itself against the risk associated with a single target business area. In addition, in most of its target areas, Qualcomm enjoys a certain popularity and quality brand image.
  • Of course, Qualcomm's positioning around the world is also appreciated, with a very strong presence in Asia in particular, which enables it to target the world's most powerful IT and technology companies.
  • Qualcomm can also rely on its strong workforce and excellent corporate governance as it employs more than 25,000 people worldwide. Of course, it also benefits from a loyal customer base.
  • Finally, investors and analysts in the industry also appreciate Qualcomm's strategy of partnerships and strategic alliances with companies in a wide variety of fields, which allows it to broaden its target audience and continually gain new market share.
The factors in favour of a drop in the Qualcomm share price:
  • First of all, despite its position among the leaders in its sector, the lack of diversity in the products developed by Qualcomm is regrettable. Indeed, apart from CDMA technologies, which Qualcomm has made its specialty, the group has a weak presence in other technological areas. This could, of course, have an impact on its ability to compete in a more diverse environment.
  • Qualcomm also suffers from low brand popularity around the world. The group would need to invest more in international marketing in order to make its name better known to its target customers. Qualcomm's major competitors are benefiting from increased brand recall.
  • In addition, Qualcomm's corporate stores may be considered obsolete or may need to be renovated and restructured to increase their profitability.
The information supplied here is only for indicative purposes and should not be used without the completion of a comprehensive and complete fundamental analysis of this asset notably taking into account exterior data, future publications and announcements and all fundamental events and news that could influence the strengths and weaknesses or make them more or less significant. This information does not in any way constitute recommendations relating to the completion of transactions.

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