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Qualcomm looks for new revenue source

Posted: 27 Apr 2015 ?? ?Print Version ?Bookmark and Share

Keywords:smartphone? Snapdragon? Internet of Things? S6? Galaxy?

Competition

Financial analysts are concerned about Qualcomm's performance for the next year, in light of growing competition from companies like MediaTek, Intel, Marvell and other local Chinese chip vendors. One analyst asked, "How does it get better from here?"

Qualcomm's Mollenkoph disagreed. "We actually see our roadmap getting stronger over time, at least based upon our view of the competitive landscape." Pointing out Qualcomm's modem leadership, Mollenkoph said, "we feel pretty good about" where the company stands with the company's important accounts. Qualcomm has also moved quickly to advanced nodes across the tiers.

Mollenkopf also explained that product cycles are fast in China, especially the modem transitions later this year. "Our competitors are having a difficult time in producing five-mode designs, certainly having the ability to do multi SIM, all of the VOIP and international features that allow them to grow. At the same time, we are changing the table stakes across the tiers on the modem."

In sum, he said, "We don't see the market dynamics as threatening as the question implied."

Splitting Qualcomm?

Qualcomm executives were asked if the company is keeping the company's chip division and licensing division together.

Jana Partners, an activist investor which owns a $2 billion stake in Qualcomm, is reportedly calling on Qualcomm to spin off its chip unit (QTI) from its patent-licensing operation (QTL).

Mollenkopf said that the business structure of the company has been looked at throughout the company's history, and "periodically discussed" at the board level.

But for now, Mollenkoph asserted, Qualcomm believes the two businesses have significant synergies.

Big M&A coming?

During the call, analysts continued to challenge the company's plan for "adjacent growth," particularly in such connected areas as IoT and auto. One analyst asked if Qualcomm has the scaleacross technology customer relationships and distributionto grow in the non-smartphone market. The question sought to clarify whether Qualcomm would consider large-scale M&A, or continue to focus on bolt-on acquisition.

Mollenkopf cited Qualcomm's acquisitions of Atheros and CSR (CSR's acquisition is expected to close at the end of this summer) as examples for Qualcomm to gain a strong portfolio of technologies.

Not to be underestimated, in Mollenkoph's opinion, is that besides technology, acquisitions can provide a "sales channel and the ability to sell into different types of customers" beyond Qualcomm's current slate of handset clients.

"We actively plan that out and that's one of the reasons why we have done M&A," said Mollenkoph.

Considering a lot of consolidations happening in the semiconductor industry, Mollenkoph said, "We're trying to keep our strategic options open."

- Junko Yoshida
??EE Times


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