) is expected to announce its fiscal year Q3 earnings on July 20th.
During the last quarter, competition has heated up as the demand
for smartphones and tablets continues to grow. In Qualcomm's
results, we will gauge how its competitive position in this market
has changed in recent months compared to competitors like Nvidia (
), Broadcom (NASDAQ:BRCM), Marvell (NASDAQ:MRVL), Infineon
(now acquired by Intel (
)) and Texas Instruments (
) in the mobile phone and tablets chispet markets.
Our $57 price estimate for Qualcomm stock
implies slight upside from the market price.
Competition Increasing for Qualcomm
Qualcomm holds patents in CDMA, WCDMA, OFDMA technology
and is the leader in the baseband chipset market based on this
technology with a market share of around 65% as of 2010. However,
competition continues to increase for Qualcomm and last quarter
Nvidia gained market share with new announcements.
Nvidia's Tegra 2 mobile processor has gained traction with
several mobile devices manufacturers like Motorola Mobility (
), Acer, LG and Samsung that have adopted Tegra 2 (see
Nvidia's Tegra 2 Chips Gain Traction
). Additionally, Nvidia acquired Icera in the past quarter which
will give it a chance to strengthen its position in the chipset
Nvidia Acquires Icera as Baseband Chipset Market
According to a recent Strategy Analytics report, the baseband
chipset market showed strong growth in Q1 2011. Qualcomm ranked
first in this market in terms of volumes and revenue though Intel
and Spreadtrum continue to show impressive growth, which could pose
a threat to Qualcomm longer term. We will watch how this increasing
competition is impacting Qualcomm's market share and margin outlook
in the pending earnings.
See our complete analysis for Qualcomm stock