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Qualcomm stands firm amid break-up considerations

Posted: 17 Dec 2015 ?? ?Print Version ?Bookmark and Share

Keywords:Qualcomm? CDMA? JANA? smartphone? modem?

Qualcomm Inc. has announced that it has completed a comprehensive review of the company and plans to stick with its current corporate and financial structure.

The company, which has suffered a difficult year, had come under pressure from activist hedge fund investor JANA Partners LLC, a significant Qualcomm shareholder, to conduct a review of the structure of the company on the grounds that an alternative structure could realise value for shareholders.

The strategic review was conducted by a special committee of the board of directors and gave a unanimous recommendation to stick with the current structure.

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As the original developer of CDMA cellular communications protocol and holder of an impressive portfolio of essential patents helped bolster Qualcomm to become a leading semiconductor company and it still is. However, its reliance on the fast-moving consumer markets also makes its fragile.

"The strategic benefits of the current structure will best fuel Qualcomm's growth as we move through the upcoming technology transitions and extend our technologies into new user experiences, services and industries," said Qualcomm CEO Steve Mollenkopf.

Responding to pressure from JANA and falling sales and profits Qualcomm has set in place a plan to cut staffing levels and focus investment in the most profitable areas.

Qualcomm is the leader in the supply of application processors and multimode modems for smartphones but the leadership comes at time when the market is flattening and competition is growing. A further negative long-term indicator for Qualcomm is that multiple geographical regions either have or are investigating Qualcomm over the terms and conditions of its IP licensing.

Qualcomm was the original developer of CDMA communications technology, which is present in 3G and 4G communications standards.

- Peter Clarke
??EE Times Europe

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