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Yesterday, 10:10 AM
- OTR Global reports Ambarella's (NASDAQ:AMBA) IP security camera and automotive SoC pricing is down 15%-20% Q/Q in Q1 due to competition in China.
- The firm also reports Qualcomm (NASDAQ:QCOM) is pushing for design wins with major Ambarella clients such as GoPro and (consumer drone leader) DJI for drone and high-end sports camera SoCs (source: Notable Calls). Qualcomm recently launched its Snapdragon Flight drone reference platform, as well as an IP security camera reference platform known as the Snapdragon 618.
- Ambarella is among the biggest tech decliners on a morning the Nasdaq is off 2.3%. Shares have made fresh 52-week lows.
Wed, Feb. 3, 11:13 AM
- Bloomberg reports Google (GOOG, GOOGL) is "planning to publicly give its support" for Qualcomm's (QCOM +1.4%) first ARM (ARMH +2.2%) server CPUs at an investor event next week. It adds Google and Qualcomm have cooperated on design work, and that the former will commit to using the latter's chips if they meet performance goals.
- Google is the world's biggest server buyer, and has largely relied on Intel's (INTC -4.1%) Xeon CPUs. The Web giant's adoption of Qualcomm processors, even if for only a fraction of its workload, would act as a major reference win for the fledgling ARM server CPU market. There has been speculation Amazon might also adopt ARM server CPUs, following its acquisition of chip startup Annapurna Labs (recently unveiled a line of low-end network processors).
- Qualcomm is just four months removed from showing off a prototype ARM server CPU featuring custom cores. The company has been hoping the server market will provide a long-term sales lift as it continues dealing with mobile pressures - Qualcomm's chip division (QCT) sales fell 22% Y/Y in calendar Q4 to $4.1B.
- Intel has been hoping to keep Google and other major Web/cloud clients loyal in part by providing custom Xeon CPUs, and by creating products that place Xeon chips and recently-acquired Altera's FPGAs (can be programmed on the fly to handle new algorithms/code) in the same package. Qualcomm has partnered with Altera archrival Xilinx.
- Qualcomm and ARM are higher in spite of a 1.6% Nasdaq drop. Intel is underperforming; shares are down 3.3% after accounting for the fact Intel is trading ex-dividend.
Thu, Jan. 28, 10:37 AM
- Initially up yesterday after posting an FQ1 beat and issuing soft FQ2 guidance - expectations were fairly low following warnings from fellow iPhone suppliers and Apple's light guidance - Qualcomm (NASDAQ:QCOM) has tumbled to new multi-year lows today.
- Aside from the guidance, Qualcomm could be pressured by an earnings call disclosure (transcript) that LG contends its royalty payments are excessive, and has taken its claim to arbitration. Qualcomm deferred over $100M worth of licensing revenue in FQ1 due to the dispute, which comes amid a probe by Korean regulators regarding Qualcomm's IP licensing practices.
- MSM shipments/device sales: Weak chip sales (including, presumably, to Apple) are set to weigh on FQ2 results: After totaling 242M in seasonally strong FQ1 (-10% Y/Y, but near the high end of a 225M-245M guidance range), MSM chip shipments are expected to drop 16-25% Y/Y in FQ2 to 175M-195M. "Improving trends" are expected for chip sales in the second half of FY16.
Reported device sales (on which royalties are collected) are expected to be down 4%-14% to $65B-$73B, after rising 7% in FQ1 to $60.6B (above guidance of $50B-$58B, thanks in part to Chinese licensing deals). Estimated 3G/4G device ASP (affects royalties) was $193-$199 in FQ1 vs. $207--$213 in FQ4 and $194-$200 a year ago. For calendar 2016, Qualcomm still sees total 3G/4G device sales rising 7%-13% to 1.67B-1.77B.
- Financials: FQ1 chip division (QCT) revenue -22% Y/Y to $4.1B; op. profit -49% to $590M. Licensing division (QTL) revenue -12% to $1.61B (the LG dispute weighed); op. profit -15% to $1.34B. Thanks to job cuts, GAAP R&D spend was flat Y/Y at $1.35B, and SG&A spend down 1% to $578M.
Lifting EPS: $2.05B was spent to buy back 36.6M shares. Qualcomm ended FQ1 with $30.6B in cash ($27.9B offshore) and $11B in debt.
- William Blair has downgraded to Market Perform, and Topeka Capital has cut its target by $2 to $50. FBR's Chris Rolland (Market Perform) is worried about the LG dispute, a perceived slowdown in mobile innovation that has allowed OEMs to increasingly use their own app processors and baseband modems, and lower royalty rates for 4G-only devices relative to multi-mode (3G/4G) devices.
- Qualcomm's results/guidance, earnings release, slides (.pdf)
Wed, Jan. 27, 4:10 PM
Tue, Jan. 26, 5:35 PM| Tue, Jan. 26, 5:35 PM | 26 Comments
Wed, Jan. 20, 3:37 PM
- According to Bloomberg, Qualcomm (QCOM -0.1%) is in preliminary talks on a joint venture with GlaxoSmithKline (GSK -0.5%) to “to develop medical technology”.
- The exact nature of the partnership remains unclear, but the rumor follows an announced collaboration between Qualcomm and Novartis on a smart inhaler for patients with chronic obstructive pulmonary disease (COPD).
Mon, Jan. 18, 3:25 AM
- Qualcomm (NASDAQ:QCOM) and the provincial government of Guizhou in southwest China have unveiled a $280M joint venture for the design, development and sale of advanced server technology.
- The tech company will also establish an investment firm in Guizhou that will serve as a vehicle for future investments in the country.
- "This underscores our commitment as a strategic partner in China," said Derek Aberle, president of Qualcomm.
Thu, Jan. 14, 4:09 AM
- Samsung Electronics (OTC:SSNLF) has started production of Qualcomm's (NASDAQ:QCOM) new smartphone processor - the Snapdragon 820 - using an upgraded, lower power version of its 14-nanometer FinFET technology.
- The contract that will help Samsung's chip foundry weather an anticipated loss of business from Apple, which is expected to shift to Taiwan Semiconductor for this year's model iPhone.
- For Qualcomm, the new processor presents a chance for the group to revive its fortunes after disappointing sales of its previous flagship Snapdragon 810 due to concerns about overheating.
Wed, Jan. 13, 6:57 PM
- Avago's (NASDAQ:AVGO) selloff following news Qualcomm (NASDAQ:QCOM) is forming a major RF filter and front-end module JV with Japanese filter maker TDK spells a buying opportunity, argues MKM's Ian Ing. He reiterates a Buy and $163 target.
- Ing: "For RF incumbents, the silver linings are: (1) TDK Epcos has less filter design iterations and manufacturing experience, likely resulting in good but not great products; (2) barring superior products, big OEM customers will likely be reluctant to decrease supplier diversity and concentrate more content with QCOM; and (3) using QRVO as a proxy, the RF360 JV likely won’t be producing integrated, jointly developed products until 18-24 months from now."
- Likewise, though he calls the JV a "credible threat" in the future, Raymond James' Tavis McCourt doesn't see a major near-term threat to Avago, Skyworks (NASDAQ:SWKS), or Qorvo (NASDAQ:QRVO). "While TDK has been working on bolstering its product line of BAW and TC-SAW filters, their biggest market share is in the lower margin SAW filter market where they have ~30%-35% market share. Qorvo and Avago by comparison control around 90% of the BAW market with various other firms including TDK making up the difference. Given that companies such as Apple are working with RF companies on the architecture on models that are three years out, we do not see them being able to gain any meaningful share in the near-term..."
- Citi's Atif Malik views the JV as a "sentiment negative" for Skyworks and Qorvo. "While QCOM has had limited success with in-house RF360 [front-end module] initiative, JV with TDK would increase competition in the market. Filters are the highest growth area in RF components given increasing number of bands and growing carrier complexity. Recall, Skyworks acquired Panasonic's TC-SAW assets last year and we believe is working closely with Taiyo Yuden on high end BAW filters."
- Discussing Qualcomm, Bernstein's Stacy Rasgon argues the JV is a long-term positive, while cautioning growing the business will take time. "[A]s a mechanism to gain necessary expertise and table-stakes capability in RF (with less risk than an acquisition, and without needing to stress the balance sheet or issue tons of low-valuation stock to do one) the actions today seem a reasonable step to take."
- On a day the Nasdaq dropped 3.4%, Avago fell 5.1%, Skyworks fell 6.7%, and Qorvo fell 9.8%. Diminished hopes of a Qualcomm buyout offer may have contributed to the selloff in Qorvo, whose market cap ($5.7B) is easily the smallest of the three names.
- Qualcomm's calendar Q4 report arrives on Jan. 27. Skyworks reports on Jan. 28, and Qorvo (warned last week) on Feb. 4.
Wed, Jan. 13, 1:57 PM
- 18 months after downgrading Qualcomm (QCOM +0.5%) on Chinese royalty concerns (shares have fallen sharply since), Susquehanna's Chris Caso has upgraded to Positive and hiked his target by $7 to $60.
- He considers the Chinese issues "mostly resolved" following last year's settlement with regulators and recent licensing deals. Caso also expects Qualcomm's Snapdragon 820 baseband/app processor (the next-gen flagship, expected to go into some Samsung Galaxy S7 models) to provide a major lift to Qualcomm's chip unit as devices containing the 820 launch in 1H16.
- Caso: "[S]ome risks still remain, given continuing government investigations, intense competition on chipsets (particularly from INTC) and the near-term slowdown at AAPL. But we feel the current stock price discounts much of this risk, and with a bias toward estimate upside this year, not to mention a 4% dividend yield and a 10% [free cash flow] yield, we think the risk/reward for the stock has once again become compelling."
- Though the Nasdaq is down 2.2%, Qualcomm is still in positive territory following the upgrade and news the company is forming a major RF filter/front-end module JV with TDK.
Wed, Jan. 13, 10:09 AM
- Qualcomm (QCOM +1.9%) is forming a 51/49 JV with Japanese electronic component maker TDK (OTCPK:TTDKY) to be known as RF360 Holdings. The JV is declared to pair TDK's RF filter/module expertise with Qualcomm's RF front-end solutions, and will create filters and front-end modules for mobile devices, IoT hardware, drones, robots, and other end-markets.
- Deal terms: The deal is expected to close by early 2017, and is estimated to have an "aggregate transaction value" of $3B. Qualcomm says its up-front capital investment will total $1.2B, and forecasts the JV will be accretive to EPS in the 12 months following closing. It has the option to buy TDK's interest in the JV 30 months after closing. Qualcomm will also buy "certain assets" from TDK, and partner with the company in areas such as sensors and wireless charging.
- Qualcomm: "RF360 Holdings will have a comprehensive set of filters and filter technologies, including surface acoustic wave (SAW), temperature-compensated surface acoustic wave (TC-SAW) and bulk acoustic wave (BAW) to support the wide range of frequency bands being deployed in networks across the globe. Moreover, RF360 Holdings will enable the delivery of [RF front-end] modules that will include front-end components designed and developed by [Qualcomm]. These components include CMOS, SOI and GaAS Power Amplifiers, a broad portfolio of Switches enhanced via a recent acquisition, Antenna Tuning and the industry's leading Envelope Tracking solution."
- In presentation slides (.pdf), Qualcomm notes the RF front-end market is expected to see a 13% CAGR from 2015-2020 (per Mobile Experts), eventually reaching a size of $18B (aided by growing mobile RF complexity and filter needs). The company adds the businesses being transferred to the JV by Qualcomm and TDK have a revenue run rate approaching $1B/year.
- Qualcomm is higher following the news, while RF chip/module maker Qorvo (QRVO -7.8%) is off sharply. Qorvo rivals Skyworks (SWKS -2%) and Avago (AVGO -1%) are seeing moderate losses. The group also sold off when Qualcomm first unveiled its RF360 front-end module in 2013.
Tue, Jan. 12, 9:06 AM
Wed, Jan. 6, 8:36 AM
- Novartis (NYSE:NVS) and Qualcomm (NASDAQ:QCOM) subsidiary Qualcomm Life will collaborate on the development of a digital version of Novartis' Breezhaler inhaler device used to treat patients with chronic obstructive pulmonary disease (COPD).
- The next-generation device, incorporating a small, disposable low power module, will enable patients to have access to their own real-time data related to their use of the product. The module will wirelessly transmit the data to the user's smartphone and a Novartis COPD mobile app, which sends the data to the cloud, allowing patients and their healthcare providers to monitor their condition. The connected device will be ready to use with no assembly required. Novartis plans to launch it in 2019.
Tue, Jan. 5, 5:12 PM
- In this year's torrent of CES week product announcements, Qualcomm (NASDAQ:QCOM) has unveiled the Snapdragon 820A automotive processor line. The chips target in-car infotainment systems, and feature specs competitive with Snapdragon SoCs aimed at high-end smartphones - a 14nm manufacturing process is used, as is Qualcomm's next-gen Kryo CPU core, Adreno 530 GPU, Zeroth A.I./neural networking tech, and an X12 LTE modem (600Mbps peak download speeds).
- Qualcomm asserts the chips allow in-car infotainment systems to be upgraded via both hardware and software updates. They take aim at Nvidia (NASDAQ:NVDA), whose Tegra processors own a large chunk of the auto infotainment processor market, as well as Intel and Texas Instruments. Meanwhile, the Snapdragon 602A line, which was announced at CES two years ago, has been designed into select 2017 Audi cars.
- Also announced: The Snapdragon X5, a low-cost 4G modem aimed at IoT devices. The chip supports 150Mbps peak download speeds, higher than those delivered by two previously-announced 4G modems meant for IoT hardware, and has a built-in ARM CPU.
- Other announcements: 1) A smart home reference platform featuring the low-power/quad-core Snapdragon 212 processor. 2) A Bluetooth Smart SoC (developed by recently-acquired U.K. chipmaker CSR) that targets power-constrained embedded devices. 3) An expansion of Qualcomm's partnership with drug giant Novartis, through which Novartis will use Qualcomm's connectivity offerings to power its Breezhaler inhaler line.
Tue, Jan. 5, 3:49 AM
- New York City will begin this month replacing thousands of pay phones with free Wi-Fi hot spots that will sit atop a 9.5-foot tall box featuring electronic advertising screens and an Android tablet that can be used to place free phone calls.
- The $200M project, called LinkNYC, is being run by CityBridge, a joint venture between three tech companies: Qualcomm (NASDAQ:QCOM), CIVIQ Smartscapes, and Intersection (which has backing from Alphabet).
- "Free abundant Wi-Fi at those speeds could give people living in NYC, the country's largest market, a reason to spend less on wireless data services from carriers such as Verizon (NYSE:VZ) and AT&T (NYSE:T)," said Craig Moffett, senior research analyst at MoffettNathanson.
Dec. 31, 2015, 5:31 PM
- Ahead of CES (runs from Jan. 6-9), Qualcomm (NASDAQ:QCOM) has released a promo video for its Snapdragon Flight drone reference platform (first announced in September). Notably, the video suggests drones built with the platform will support a measure of autonomous navigation. "With autonomous path planning, getting back home from Point B is done automatically for you," goes the voice-over.
- Motion planning and obstacle mapping are also said to be supported, along with the ability to include both stereo cameras and a down-facing tracking camera (i.e. an optical flow camera). Qualcomm previously stated Flight will feature a Snapdragon 801 SoC (2.2GHz., quad-core) to go with Bluetooth/Wi-Fi/GPS connectivity, 4K video support, and rapid charging.
- In October, Qualcomm exec Raj Talluri laid out ambitious cost and battery life targets for Flight. "We believe that, with this chip, we can cut the price of the average 4K camera drone from $1,200 down to $300 or $400 ... And we think we can extend the battery life from 20 minutes to 45 to 60 minutes." China's Yuneec is among the first OEMs to support Flight.
- Ambarella (NASDAQ:AMBA), whose drone exposure (as a % of revenue) is above 10% and growing, maintains a large chunk of the drone processor market for now through its video-processing SoCs. The company has argued its video processors are more power/resource-efficient than SoCs from the likes of Qualcomm and Intel.
- In July, Ambarella announced the purchase of computer vision and autonomous vehicle tech developer VisLab. Nvidia, meanwhile, has launched the Jetson TX1, a credit card-sized module for drones and autonomous cars that contains the company's Tegra X1 processor and is declared to use machine learning to "perform complex tasks such as recognizing images, processing conversational speech, or analyzing a room full of furniture and finding a path to navigate across it."
Qualcomm Inc develops digital communication technology called CDMA (Code Division Multiple Access), & owns intellectual property applicable to products that implement any version of CDMA including patents, patent applications & trade secrets.
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