Sep. 18, 2014, 1:56 PM
- Ericsson (ERIC +4.5%) is joining Broadcom and Texas Instruments in exiting an R&D-intensive mobile baseband modem market dominated by Qualcomm (QCOM +0.6%) and MediaTek. The mobile infrastructure giant says it will discontinue baseband development, and direct some of the resources to base station R&D.
- ~500 workers will be added to Ericsson's mobile radio network teams. With the baseband unit currently having 1,582 workers, that suggests over 1K jobs could be cut. For reference, Ericsson estimates its 2014 baseband R&D spend will be SEK2.6B ($366M).
- Shares are up strongly on the news. Ericsson's baseband ops (focused on 4G modems) stem from the winding down of its ST-Ericsson JV last year.
- In addition to MediaTek, Qualcomm still faces baseband competition from Intel, Nvidia, Spreadtrum, Marvell, and (indirectly) Samsung. While MediaTek and Spreadtrum are profitable, Intel's mobile unit (also covers app processors) has been posting big losses, and (though the companies don't break out the numbers) analysts have estimated Nvidia and Marvell's baseband ops are producing little or no profit.
Sep. 16, 2014, 1:13 PM
- China's investigation of Qualcomm (QCOM +0.9%) is nearing an end and about to enter the "punishment phase," says analyst Stacy Rasgon, basing his view on "news flow" over the past few days.
- The result, he says, is likely to lead to changes in the company's business practices, noting among the charges is Qualcomm's charging of royalties based on the value of the device itself. The changes, then, might see Qualcomm matching its royalty rate to the value of the chips instead.
- These sorts of resolutions take time, reminds, Rasgon, in which Qualcomm would have to submit proposals, and then Beijing would vet them, getting input from OEMs. He reiterates his Market Perform rating.
Sep. 4, 2014, 4:38 PM
- Nvidia (NASDAQ:NVDA) alleges Qualcomm's (NASDAQ:QCOM) Snapdragon processors and Samsung's Exynos processors infringe "GPU patents covering technology including programmable shading, unified shaders and multithreaded parallel processing." Complaints have been filed at a Delaware district court and the ITC.
- A number of Samsung phones/tablets relying on Qualcomm and/or Samsung processors are featured in the complaint, including the Galaxy S5, Note 4, Tab S, and Tab 2.
- Qualcomm's processors feature proprietary Adreno GPU cores, while Samsung's rely on cores developed by ARM and Imagination. Nvidia's Tegra processor line competes against Qualcomm and (indirectly) Samsung's offerings.
- Nvidia already has a multi-year patent licensing deal with Intel that nets the company $66M/quarter. Last year, Nvidia announced it's willing to license its Kepler GPU architecture to third parties. Interest has been limited thus far.
- Given its giant patent portfolio, Qualcomm might be tempted to file a countersuit.
- Shares +0.5% AH.
Sep. 3, 2014, 10:13 AM
- As rumored, Samsung's (OTC:SSNLF, OTC:SSNGY) Galaxy Note 4 sports a 5.7" quad-HD (2560x1440) display; the Note 3 has a 1080p display. Other improvements include a revamped S Pen (twice the pressure sensitivity, among other things), a metal rim, and the addition of optical image stabilization, a fingerprint scanner, and a heart rate sensor.
- The U.S. version will run on Qualcomm's (QCOM +0.8%) high-end Snapdragon 805 processor (2.7GHz., quad-core) and support Cat-6 LTE; the Note 3 uses the Snapdragon 800. Some international models will use Samsung's Exynos 5433 processor (1.9GHz., 8-core) and only support Cat-4 LTE. The 5433 beat the 805 in some early benchmarks.
- Samsung has also launched the Note Edge, a phone with combines most of the Note 4's specs with a display that curves downwards at the sides. Samsung argues the edges of the display can be used to quickly glance at information while the phone is lying on a table.
- Samsung, which pioneered the phablet market 3 years ago, is counting on the Note 4/Edge to both counter hungry Chinese OEMs that have been grabbing share, and deal with the pending launch (per numerous reports) of a 5.5" iPhone 6. The company still maintains a high phablet share in the U.S.
- Universal Display (OLED +1.4%) benefits from Samsung's use of a quad-HD display, since the panel requires more OLED materials than a 1080p display.
Aug. 29, 2014, 5:55 PM
- Amir Faintuch, the president of Qualcomm's (NASDAQ:QCOM) Atheros Wi-Fi/connectivity chip unit, has been hired by Intel (NASDAQ:INTC) to be an SVP/co-GM for its Platform Engineering Group (handles chip R&D).
- Intel spokesman Chuck Mulloy talks up Faintuch's expertise in SoC development - though best known for its Wi-Fi offerings, Atheros' product line now also covers Bluetooth, GPS, and home networking ICs, as well as Wi-Fi/Bluetooth combo chips.
- Intel's bio page currently shows 3 Platform Engineering GMs: Rani Borkar, Aicha Evans, and Joshua M. Walden. However, each has the title of VP rather than SVP.
- Qualcomm is only a year removed from seeing Faintuch's predecessor, Craig Barratt, leave for Google. More recently, the company saw business development/Qualcomm Labs chief Peggy Johnson leave for Microsoft.
- Separately, Intel has launched new Core i7 Extreme Edition CPUs. Though the 22nm chips are (high-margin) niche products meant for gaming rigs and low-end workstations, they're notable for being the first Intel desktop CPU line to support eight cores and DDR4 RAM (previous). Pricing ranges from $389-$999.
- Update: Reuters has updated its column to state Faintuch will co-manage the Platform Engineering Group with Walden.
Aug. 26, 2014, 10:22 AM
- Reuters reports EU antitrust regulators might launch a Qualcomm (QCOM -0.3%) probe following a complaint from Nvidia's Icera 4G baseband chip unit. One source says a case may be opened after this summer.
- The report arrives amid signs of progress in Qualcomm's ongoing dispute with Chinese regulators. Authorities recently suggested Qualcomm has shown a willingness to improve its pricing (i.e. charge lower royalty rates) to end the dispute.
- Cowen's Timothy Arcuri thinks accepting a lower rate is an acceptable compromise, given Qualcomm's recent Chinese issues. "QCOM would be better off to cede major swaths of royalties in China rather than jeopardize existing cash flows."
Aug. 21, 2014, 6:35 AM
- Chinese antitrust officials have reached out to South Korea's regulatory commission in order to talk over Qualcomm's (NASDAQ:QCOM) violations of a 2008 anti-monopoly law.
- South Korea previously fined Qualcomm more than $200M in 2009 for abusing its dominant market position and China is looking for ways to handle the violations back home.
- China's anti-trust regulator can issue a fine of as much as a tenth of a company's annual revenue, which was $25B for Qualcomm this past year.
Aug. 14, 2014, 10:11 AM
- Qualcomm (QCOM +0.3%) has bought 4.15M Globalstar (GSAT +6.4%) shares, the company discloses in a new 13F. Globalstar shares have popped in response.
- Globalstar was originally formed as a JV between Qualcomm and Loral in 1991. Qualcomm wrote down most of its investment in the satellite network owner a decade later, shortly before Globalstar filed for Chap. 11. Globalstar finished restructuring in 2004.
- Separately, Qualcomm has denied a Chinese media report claiming it has financial ties with Zhang Xinzhu, an antitrust expert who was just removed from a government advisory post. Qualcomm says it simply paid a consultancy employing Xinzhu to produce an economic analysis for regulators.
- Qualcomm is dealing with both a Chinese antitrust probe and an SEC bribery probe. The company stated last month it thinks some Chinese licensees are under-reporting their 3G/4G device sales, and that some might be holding off on getting licenses while the antitrust probe continues.
Aug. 5, 2014, 6:50 PM
- Microsoft (NASDAQ:MSFT) has hired Peggy Johnson, an EVP for Qualcomm's (NASDAQ:QCOM) chip unit (Qualcomm Technologies), to be its new business development chief. Johnson arrives 5 months after Microsoft announced her predecessor, one-time CEO candidate Tony Bates, is leaving.
- At Qualcomm, Johnson was responsible for creating new business opportunities and strategic relationships, a role not too different from the one she'll have at Microsoft. Johnson was also in charge of Qualcomm Labs, the mobile chip/IP giant's business incubation arm.
- "Peggy shares our worldview and knows what it takes to drive new growth in mobility and the cloud," says Satya Nadella. The hiring of a mobile exec to run business development comes shortly after Microsoft added mobile industry vet John Stanton to its board.
Jul. 24, 2014, 9:18 AM
Jul. 23, 2014, 5:29 PM
- "We ... believe that certain licensees in China currently are not fully complying with their contractual obligations to report their sales of licensed products to us," Qualcomm (NASDAQ:QCOM) states in its FQ3 report.
- The company thinks device sales are being under-reported, and that some firms might be holding off on getting licenses while the Chinese government continues its antitrust probe (widely seen as an attempt to negotiate lower 4G royalty rates). Qualcomm is also dealing with an SEC probe over alleged Chinese bribery.
- While Qualcomm now expects 1.3B global 3G/4G device shipments in calendar 2014 - that's up from 1.075B-1.091B in 2013 and at the high end of a prior 1.22B-1.3B guidance range - it expects only 1.04B-1.13B to be reported to the company for royalty payments.
- FQ3 EPS received a lift from $1.35B in buybacks. Qualcomm plans to spend a minimum of $1B on buybacks in FQ4.
- A 31% increase in MSM shipments led to a 17% increase in chip division sales to $5B (lower ASPs?). Cost controls helped the division's op. profit rise 51% to $1.12B. FQ4 MSM chip sales are expected to be up 25% at the guidance midpoint.
- On the other hand, licensing division revenue fell 3% to $1.8B, and segment op. profit fell 5% to $1.55B. With China weighing, Qualcomm expects reported device sales to be down 2%-12% Y/Y in FQ4.
- FY14 3G/4G device ASP guidance has been tweaked to $222-$228 from $218-$228. That's nearly even with FY13's $223-$229.
- FQ3 results, PR, slides (.pdf), device forecasts (.pdf)
Jul. 23, 2014, 4:05 PM
- Qualcomm (NASDAQ:QCOM): FQ3 EPS of $1.44 beats by $0.22.
- Revenue of $6.81B (+9% Y/Y) beats by $290M.
- 225M MSM chip shipments, +31% Y/Y and above guidance of 198M-213M.
- Expects FQ4 revenue of $6.5B-$7.4B and EPS of $1.20-$1.35 vs. a consensus of $7.15B and $1.39. Expects 230M-245M FQ4 MSM chip shipments.
- Shares -0.7% AH.
- Press Release
Jul. 22, 2014, 5:35 PM
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Jul. 22, 2014, 2:52 PM
- Qualcomm's (QCOM +2.4%) chip unit likely exceeded Street expectations in FQ3 on the back of solid 4G chip demand, writes Cowen's Timothy Arcuri ahead of tomorrow's earnings report.
- Arcuri also believes licensing/royalty revenue will beat estimates thanks to strong shipments of royalty-bearing 3G/4G devices (royalties will be based on FQ2 shipments).
- Though Qualcomm is facing tougher 4G baseband chip competition this year thanks to new launches from Intel, Broadcom, and Nvidia, the company still accounts for the lion's share of the market, and maintains an edge in areas such as app processor integration, frequency band support, and the integration of LTE-Advanced features.
- Shares are rallying following Cowen's note and a strong Q2 report from ARM. The CPU core developer collected royalties on 2.7B Q1 chip shipments (+11% Y/Y), and says it expects a 2H royalty pickup as "more chips are sold to OEMs building more advanced devices."
Jul. 18, 2014, 9:27 AM
Jul. 11, 2014, 7:46 AM
- The catalysts noted in the November upgrade "have largely played out," says analyst Simona Jankowski, cutting Qualcomm (QCOM) to Buy from Conviction Buy.
- The team trims its June and September quarter estimates to reflect weaker handset demand, but views the issues as "transitory and not thesis-changing over the longer term."
- Shares -1.2% premarket
QCOM vs. ETF Alternatives
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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