Qualcomm rallies; Goldman calls new China Mobile policy a positive


China Mobile's decision (officially announced on Friday) to require all 4G phones sold by the company as of May 31 to support five air interfaces should bolster Qualcomm's (QCOM +3.4%) 4G baseband chip sales and Chinese royalty collections, thinks Goldman's Simona Jankowski.

Jankowski observes Qualcomm "has the most mature and broad portfolio" of 5-mode mobile SoCs, and that the company could have an easier time collecting royalties from Chinese OEMs on sales of phones supporting the globally-adopted 4G FDD-LTE and 3G W-CDMA standards. Qualcomm has had trouble collecting on sales of phones supporting China Mobile's 3G TD-SCDMA standard (but not W-CDMA).

She also points out China Mobile is hoping to sell 100M 4G phones this year, after having launched commercial 4G services in late 2013. The Chinese government's antitrust probe remains an overhang, though as Jankowski notes, that's tied to royalty rates rather than Qualcomm's right to collect.

Previous: Qualcomm could benefit from China Mobile 5-mode requirement

Update: SA commenter Philip Marlowe notes RF component makers (RFMD, TQNT, SWKS, AVGO, ANAD) should also benefit from the policy change, as 5-mode phones require more RF circuitry than 3-mode phones.

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Comments (2)
  • Philip Marlowe
    , contributor
    Comments (1547) | Send Message
     
    This is also a big positive for the analog radio frequency chip makers. These include SWKS, AVGO, RFMD, TQNT, etc. Of the above, in my personal opinion, SWKS is the best positioned and will probably get the most benefit.
    17 Mar 2014, 02:55 PM Reply Like
  • Eric Jhonsa
    , contributor
    Comments (1276) | Send Message
     
    Good point. Updated the post to make note of it.
    17 Mar 2014, 03:04 PM Reply Like
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