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Qualcomm Inc. (QCOM)

- NASDAQ
  • Mon, Apr. 27, 3:06 AM
    • As the country looks to reduce its reliance on foreign technology, Qualcomm (NASDAQ:QCOM) has launched a division to help Chinese smartphone makers sell units overseas, looking to build stronger relationships following its record $975M antitrust fine.
    • Qualcomm, which draws about half of its revenue from customers in China, established an office in Shenzhen last quarter to assist both small and large Chinese handset manufacturers build global businesses.
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  • Wed, Apr. 22, 6:37 PM
    • Echoing its January remarks, Qualcomm (NASDAQ:QCOM) states it's cutting its chip division (QCT) outlook for the second half of FY15 due to "customer share shifts within the premium tier" that will lead to a mix shift towards baseband modems relative to Snapdragon baseband/app processors (a reference to Apple's share gains), and "a decline in our share at a large customer" (a reference to Samsung and its Galaxy S6 choices).
    • The company also says that while it settled with Chinese regulators in February, it thinks some Chinese licensees still aren't fully reporting device sales, and believes "it will take some time for licensees to decide whether to accept the new China terms or retain the terms of their existing agreements."
    • Thus, while Qualcomm expects 1.52B-1.6B 2015 3G/4G device sales (up from 2014's 1.37B), it's not providing guidance for 2015 reported sales. Guidance for FY15 reported device sales has been slightly hiked to $255B-$270B (+5%-13% Y/Y) from $245B-$270B.
    • The company has "initiated a comprehensive review of our cost structure to identify opportunities to improve operating margins." Jana Partners is likely pleased. FQ3 guidance implies a 9%-21% Y/Y sales drop, and revised FY15 guidance a range of -6% to +2%.
    • QCT revenue rose 5% Y/Y in FQ2 to $4.43B; op. profit rose 1% to $750M. IP licensing division (QTL) revenue rose 17% to $2.41B (calendar Q4 iPhone 6 sales provided a lift); op. profit rose 18% to $2.16B. R&D spend rose just 2% to $1.19B; SG&A spend fell 1% to $447M.
    • $1.9B was spent on buybacks in FQ2, and another $541M has been spent since. Qualcomm has promised to spend $10B on buybacks from March 2015-2016, on top of a promise to return at least 75% of free cash flow to shareholders.
    • QCOM -2.7% AH to $67.08.
    • FQ2 results/guidance, PR, earnings slides (.pdf)
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  • Wed, Apr. 22, 4:07 PM
    • Qualcomm (NASDAQ:QCOM): FQ2 EPS of $1.40 beats by $0.07.
    • Revenue of $6.89B (+8.2% Y/Y) beats by $60M.
    • Expects FQ3 revenue of $5.4B-$6.2B and EPS of $0.85-$1.00, below a consensus of $6.5B and $1.14.
    • Expects FY15 (ends Sep. '15) revenue of $25B-$27B and EPS of $4.60-$5.00 vs. a consensus of $27.22B and $5.00.
    • 233M FQ2 MSM chip shipments, in-line with guidance of 220M-240M. 210M-230M shipments expected in FQ3.
    • Shares -1.1% AH.
    • Press Release
    | 2 Comments
  • Tue, Apr. 21, 5:35 PM
  • Mon, Apr. 20, 5:39 PM
    • Backing up industry speculation to the effect (as well as a 2014 Digitimes report that pointed in this direction), Re/code reports Qualcomm's (NASDAQ:QCOM) Snapdragon 820 baseband/app processor (its next-gen flagship) will be made using Samsung's (OTC:SSNLF) 14nm FinFET (3D transistor) manufacturing process. Qualcomm has historically relied on TSMC (NYSE:TSM) to make its most advanced processors, though it also does business with other foundries.
    • The scoop follows a slew of reports stating Samsung's 14nm process will be used to manufacture at least a majority of Apple's A9 CPUs; KGI reported last week TSMC (set to ramp 16nm FinFET production) will handle 30% of A9 production after (Samsung 14nm partner) GlobalFoundries encountered yield issues.
    • No word on whether Samsung will reward Qualcomm's decision by using the 820 in future high-end phones. Samsung opted to use its Exynos 7420 processor (also made using its 14nm process) instead of Qualcomm's Snapdragon 810 (made using TSMC's 20nm process) in the Galaxy S6, and is also using its own baseband modems in a large chunk of S6 units.
    • The 820, which makes use of Qualcomm's next-gen Kryo CPU core and Zeroth neural networking tech, begins sampling in 2H15. The timetable suggests commercial hardware featuring the SoC could arrive in 1H16 (in time for the Galaxy S7?). Qualcomm's FQ2 report is due on Wednesday.
    | 44 Comments
  • Mon, Apr. 13, 1:36 PM
    • "[W]e think they ought to do just a transparent review, and determine whether it makes sense, but we are not definitely saying they should split it up," says Jana Partners' Barry Rosenstein on CNBC, after Jana issued a letter urging Qualcomm (QCOM -0.1%) to consider a breakup.
    • Qualcomm considered spinning off its chip division (QCT) from its IP licensing division (QTL) in 2000 amid heated licensing talks with Nokia. Synergies exist between the businesses: Qualcomm's patent portfolio helps QCT obtain more favorable patent licensing terms from third parties, and R&D carried out by QCT adds to QTL's portfolio.
    • Rosenstein is more insistent on wanting Qualcomm to up its buybacks. The company is just a month removed from announcing a new $15B buyback and promising to repurchase $10B worth of shares within 12 months, on top of a commitment to return 75% of free cash flow to shareholders. However, Rosenstein notes Qualcomm's cash balance is still equal to 30% of its market cap.
    • Part of Rosenstein's argument for mulling a breakup: With Qualcomm trading at 9x EPS excluding cash, he thinks QCT has a "negative valuation" if one assigns a fair market value to QTL. "Obviously, it’s not worth a negative value ... We think they need to figure out what they can do to close that valuation gap."
    • Qualcomm has responded to Jana's letter by highlighting its existing buyback efforts and stating "prior reviews have concluded that the synergies provided by our business model create more value for stockholders than could be created through alternative corporate structures."
    • Jana's call comes as Andreessen Horowitz VC Scott Kupor argues the obsession of activist investors with near-term profits has hurt tech M&A activity. Qualcomm has been fairly acquisitive in recent years.
    • After opening sharply higher, Qualcomm is now near breakeven.
    | 1 Comment
  • Mon, Apr. 13, 2:18 AM
    • Qualcomm (NASDAQ:QCOM) is now under pressure from activist investor Jana Partners to consider a breakup and other options to boost its sagging stock price.
    • According to a quarterly letter reviewed by the WSJ, Jana is asking Qualcomm to consider spinning off its chip unit from its patent-licensing business, cut costs, accelerate stock buybacks and make changes to its executive-pay structure.
    • Over the last year, Qualcomm shares have dropped over 11%.
    | 14 Comments
  • Wed, Apr. 8, 10:03 AM
    • Qualcomm (NASDAQ:QCOM) declares $0.48/share quarterly dividend, 14.3% increase from prior dividend of $0.42.
    • Forward yield 2.85%
    • Payable June 24; for shareholders of record June 3; ex-div June 1.
    | 8 Comments
  • Mon, Apr. 6, 12:08 PM
    • In a Markman hearing for Nvidia's (NVDA +1.1%) ITC infringement suit against Qualcomm (NASDAQ:QCOM) and Samsung, administrative law judge (ALJ) Thomas Pender has ruled "claim constructions favorable to NVIDIA will be applied to six out of seven disputed claims," Nvidia asserts.
    • Pender will rely on the claim constructions to rule on Nvidia's infringement claims. The ITC commission typically provides a final decision a few months after an ALJ's ruling.
    • Last year, Nvidia sued Qualcomm and Samsung for allegedly infringing "GPU patents covering technology including programmable shading, unified shaders and multithreaded parallel processing," via their Snapdragon and Exynos app processors; Samsung has filed countersuits. Nvidia competes against Qualcomm and (indirectly) Samsung via its Tegra processor line.
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  • Mon, Apr. 6, 9:16 AM
    • Believing Samsung's plans to use its own baseband modems in AT&T's version of the Galaxy S6 signals the company's intent to "utilize proprietary baseband whenever and wherever possible," FBR's Chris Rolland has downgraded Qualcomm (NASDAQ:QCOM) to Market Perform, and cut his target by $8 to $72.
    • Rolland does think Verizon/Sprint S6 models will use Qualcomm modems. The downgrade follows a Chipworks teardown of an S6 model expected to go to multiple carriers featuring no Qualcomm chips, and a WSJ report stating Qualcomm will have a "meaningful" S6 modem share (no percentage was specified).
    • Shares have fallen to $66.50 premarket.
    | 1 Comment
  • Sat, Apr. 4, 2:42 PM
    • Though a Chipworks Galaxy S6 teardown found no Qualcomm (NASDAQ:QCOM) chips, the company will remain the S6's modem supplier for "a meaningful share" of units, a source tells the WSJ.
    • A likely factor: While Samsung's 300 series Exynos modems support GSM, HSPA+, TD-SCDMA, and LTE, they don't support the 3G EV-DO air interface used by Verizon, Sprint, and a few international carriers. A Sprint RDF file contains code suggesting its version of the S6 will use Qualcomm's MDM9635 modem (also used by Samsung's Galaxy S5 Prime).
    • Samsung still appears to be exclusively using its 8-core Exynos 7420 as the S6's app processor. Though the WSJ doesn't state whether Qualcomm will do so, there's a chance the company will also supply complementary RF transceiver, power management, and envelope-tracking ICs in units containing its modems, as is the case with the iPhone 6 (relies on a Qualcomm modem and several complementary chips to go with Apple's A8 app processor).
    | 13 Comments
  • Fri, Apr. 3, 3:20 PM
    • Whereas Qualcomm (NASDAQ:QCOM) had six chips designed into many Galaxy S5 models, a Chipworks teardown of Samsung's (OTC:SSNLF) Galaxy S6 didn't turn up a single Qualcomm part.
    • In addition to eschewing the Snapdragon 810 app processor (widely reported, and hinted at by Qualcomm itself) in favor of its 8-core Exynos 7420, Samsung (possibly prioritizing margins over performance/battery life) replaced Qualcomm baseband modem, power management, RF transceiver, and envelope tracking chips with home-grown parts. As expected, Samsung is also using its own DRAM/NAND chips and image processor.
    • Though Chipworks says it needs to confirm, the site believes Samsung is also using its own NFC controller. NXP (NASDAQ:NXPI) supplies the S5's NFC controller (as well as the iPhone 6's).
    • Broadcom (NASDAQ:BRCM) might also be a casualty of Samsung's attempts to buy local: Whereas the S5 contained a Wi-Fi module from Broadcom combo chip client Murata, Chipworks uncovered a Samsung Wi-Fi module - Samsung has already been using home-grown combo chips in cheaper phones. On the other hand, a Broadcom GPS/GNSS chip is included.
    • A Texas Instruments (NASDAQ:TXN) wireless power receiver handles wireless charging for the S6; many expected IDT (NASDAQ:IDTI), which supplies a transmitter chip for the S6's wireless charging pad, would score the design. Meanwhile, Cirrus Logic's (NASDAQ:CRUS) Wolfson unit supplies an audio codec IC, and Maxim (NASDAQ:MXIM) is providing an audio amplifier and complementary power management IC.
    • Skyworks (NASDAQ:SWKS) and Avago (NASDAQ:AVGO) have won RF slots: The former provides a multi-mode/multi-band front-end module and antenna switch, and the latter two power amplifier modules. Both companies also had S5 design wins.
    • Not surprisingly, InvenSense (NYSE:INVN) is providing a 6-axis gyroscope/accelerometer (the MPU-6500). As was rumored, STMicroelectronics (NYSE:STM) won the touch controller slot, beating out S5 supplier Synaptics.
    • While Qualcomm lost out on the S6, the company has landed a number of other Snapdragon 810 design wins for high-end Android phones. The Snapdragon 820, which sports a next-gen ARM CPU core (Kryo) and Qualcomm's Zeroth neural networking tech, begins sampling in 2H15. 3D SoCs (said to enable a 50% shrink in die size) are expected to enter testing in 2016.
    • The Chipworks teardown follows a long list of glowing reviews for the S6 - reviewers especially like the 2K display and Samsung's decision to go with a metal/glass body instead of the usual plastic - and reports of production hikes and strong pre-orders. Sales start on April 10.
    • Update: A Chinese S6 teardown turned up a chip said to be an NXP NFC part; its name (the 66T05) is very different from the chips in NXP's announced NFC controller line. A Sprint RDF file indicates Sprint's version of the S6 features Qualcomm's MDM9635 modem. That suggests Samsung could use Qualcomm modems for phones requiring 3G EV-DO compatibility (those used by Sprint, Verizon, and a handful of overseas carriers).
    | 33 Comments
  • Fri, Mar. 27, 11:48 AM
    • After falling 8.3% over the last two days thanks to a major chip stock selloff, Skyworks (NASDAQ:SWKS) is recovering some of its losses in the wake of a $15 Northland Securities target hike to $105. Northland's target was at $80 prior to Skyworks' Jan. 22 FQ1 beat.
    • Meanwhile, Citi and Rosenblatt are dueling over near-term smartphone demand. Citi has respectively cut its 2015 and 2016 smartphone unit growth forecasts to 16% and 13% from 19% and 15.5% due to a belief Chinese/emerging markets demand is softer than expected. "We expect a challenging outlook for smartphone companies with high China exposure." With OEMs typically pricing phones in dollars, a strong dollar is seen hurting sales to "price-sensitive markets" in general.
    • Rosenlatt, by contrast, says supply chain talks suggest little has changed. "We don’t believe that Taiwan Semi‘s and SanDisk’s forecast cuts are related to the overall smartphone industry ... We believe that Samsung is increasing [Chinese] production from 3 million per month in Q1 to 7-8 million per month in Q2. Qualcomm (NASDAQ:QCOM) and MediaTek are also seeing strong orders from China."
    • In addition to Qualcomm/MediaTek, Rosenblatt expects Skyworks, Avago (NASDAQ:AVGO), Synaptics (NASDAQ:SYNA), and Micron (NASDAQ:MU) to benefit from healthy Chinese demand. The firm argued back in December Skyworks and Micron would benefit.
    | 3 Comments
  • Fri, Mar. 20, 2:15 PM
    • The 3G-only Lumia 430 is Microsoft's (MSFT +1.4%) cheapest Windows Phone to date. It has a 4" 800x480 display and 8GB of storage, runs on Qualcomm's (NASDAQ:QCOM) low-end Snapdragon 200 processor (dual-core, 1.2GHz.), and contains a 2MP rear camera to go with a VGA front camera.
    • The 430, which goes on sale in April, also supports dual SIMs (important for emerging markets) and comes with up to 30GB of free OneDrive cloud storage. Its unveiling arrives three weeks after Microsoft launched the mid-range Lumia 640 and 640XL, and four months after it launched the low-end Lumia 535 (5" display and 3G-only, starts at €110).
    • Low-end devices are believed to account for a big portion of the 10.5M Lumias Microsoft sold in calendar Q4. While costlier Lumias have struggled to gain ground against the iPhone and high-end Android hardware (thanks in part to iOS/Android's app support edge), cheaper models have fared well in many cost-sensitive emerging markets. The 430 aims to significantly lower the cost edge the cheapest Android devices still have.
    • IDC estimates Windows Phone had a 2.8% global smartphone unit share in Q4 vs. 76.6% for Android (NASDAQ:GOOG) and 19.7% for the iPhone (NASDAQ:AAPL).
    | 30 Comments
  • Wed, Mar. 18, 10:42 AM
    • Windows 10 (MSFT +0.1%) "will be available this summer in 190 countries and 111 languages," OS chief Terry Myerson writes in a blog post. COO Kevin Turner previously said Windows 10 would be available in in late summer or early fall.
    • Meanwhile, during a talk with Reuters, Myerson stated Microsoft will be "upgrading all qualified PCs, genuine and non-genuine, to Windows 10." He asserts Microsoft's goal with the initiative is to "re-engage" with Chinese Windows users, a huge percentage of whom have pirated copies.
    • To further its Chinese Windows reach, Microsoft has struck distribution deals with Lenovo, Tencent, and Qihoo; Lenovo will offer Windows 10 "upgrade services" at 2,500 service centers and retail stores, while Tencent and Qihoo will provide the OS to the hundreds of millions of users of their Web services.
    • In January, Microsoft promised Windows 10, which contains many features meant to win over enterprises that shunned Windows 8, would be a free upgrade for Windows 7 and 8.1 users. The company has suggested it will rely more on services to monetize Windows (already free or discounted for smaller/cheaper hardware) going forward.
    • Microsoft is coming off a December quarter in which its Windows OEM Pro and non-Pro revenue both fell 13% Y/Y, thanks largely to discounts and slowing business PC sales. Intel's Q1 warning (blamed on business weakness and lower-than-expected customer inventories) suggests PC demand has remained soft thus far in 2015.
    • Also: Myerson says Microsoft is launching a free version of Windows 10 for small-footprint embedded/IoT devices. Qualcomm (NASDAQ:QCOM) is among the early supporters, launching a development kit that features its mid-range Snapdragon 410 processor.
    | 20 Comments
  • Wed, Mar. 11, 10:36 AM
    • VentureBeat reports Intel's (INTC +3.7%) recently-announced XMM 7360 4G baseband modem (made by its Infineon unit) will go into 2016 iPhone units aimed at emerging markets in Asia and Latin America, thus partly taking a slot reserved for several years by Qualcomm's (QCOM -0.9%) Gobi modems.
    • The site adds Apple (NASDAQ:AAPL) engineers "have been making trips to Munich, Germany to work with Intel engineers to ready the Intel LTE chip for the iPhone," and that Intel "has been willing to go a long way to get its LTE chips into Apple phones." Infineon was once the iPhone's (3G) baseband supplier, before Apple switched to Qualcomm.
    • The XMM 7360 supports Cat-10 LTE (450 Mbps peak download speeds), as well as 3x carrier aggregation. Qualcomm, which still claims the lion's share of the 4G baseband market, announced a Cat-10 LTE modem (the Gobi 9x45) last November that was declared to offer better power consumption and take up less board space than the prior-gen/Cat-6 9x35.
    • Apple sold 193M iPhones last year, and will likely top 200M this year. As is the case with many other clients, Qualcomm's modem sales to Apple help enable the sale of several complementary parts - an RF transceiver, a power management IC, a receive-only chip, and an envelope-tracking IC that lowers power draw.
    • Intel is up sharply today after selling off hard yesterday amid a market rout. The chip giant has already seen 18.2M shares traded vs.a 3-month daily average of 29M.
    | 22 Comments
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Company Description
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.