), one of the leading manufacturers of CDMA-based smartphone
chipsets, plans to acquire the Israeli firm DesignArt. This will be
Qualcomm's second acquisition in Israel following the buyout of
mobile web company iSkoot in 2010.
DesignArt Networks specializes in developing data-centric mobile
radio access network (RAN) coupled with highly integrated
system-on-chip (SoC) technology. Moreover, it provides trial-ready
embedded SW support for 3G/4G and high-speed wireless backhaul
Qualcomm is expected to pay anywhere between $120 to $140
million to purchase DesignArt Networks. The acquisition is expected
to boost Qualcomm's Atheros Division, which focuses on developing
Wi-Fi chips for televisions, video games, printers, and other home
We believe that over the long haul, diversification of its
product portfolio, strong balance sheet and increased demand for
smartphones and tablets will act as positive catalysts for the
On the downside, we believe that increasing the supplier base
will expand its operating expenses in the near term. Moreover,
stiff competition from rival
) Tegra 3 quad-core processors may exert additional pressure on
Qualcomm's market share in 2012, as they might lose certain
wireless equipment manufacturers due to the shortage of chipsets.
We thus maintain our long-term Neutral recommendation on
Currently, Qualcomm retains a Zacks #3 Rank, implying a
short-term Hold rating on the stock.
Qualcomm Inc. designs, develops, and supplies semiconductors and
collects royalties on wireless handheld devices and infrastructure
based on its dominant position in CDMA and other related technology
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