In 1985, seven industry veterans came together in the den of Dr.
Irwin Jacobs' San Diego home to discuss the idea of building
) introduced the concept that a digital communication technique
called CDMA (Code Division Multiple Access) could be commercially
successful in cellular wireless communications.
Indeed, CDMA was highly successful, and Qualcomm has rapidly grown
to become a world-leading provider of 3G, 4G, and next-generation
wireless technology and services, with revenues now topping $19
Because Qualcomm led and continues to lead the development and
commercialization of CDMA technology by investing 20% of sales in
research and development, it owns significant intellectual
property. About 35% of 2012 revenues was derived from licensing and
royalty fees, including revenues from
In addition, Qualcomm is the world's largest fabless semiconductor
producer, and the largest provider of wireless chipsets and
software technology, which power the majority of all 3G devices
The company's unmatched wireless innovations enable new generations
of increasingly powerful smartphones, computers, tablets, and
consumer electronics. The need to stay connected anywhere and
anytime is driving strong demand for Qualcomm's products and
services, especially for applications such as e-mail, access to the
mobile Internet, downloading of videos, and social networking.
Sustained long-term growth opportunities will come from new mobile
computing applications, emerging market growth, and increased data
Qualcomm's profitable operations have generated strong cash flows.
Free cash flow more than doubled over the last five years, to $4.7
billion at the end of 2012.
The company returned a cumulative $20.3 billion to shareholders
through dividends and share repurchases since 2003. Management
recently increased the dividend 40% to an annualized rate of $1.40
per share. In addition, the company announced a new $5 billion
stock repurchase program.
Long-term investors should use a wireless device to check out
Qualcomm, a high-quality technology leader with outstanding
financial strength and healthy growth.
Editor's Note: This article was written by Ingrid Hendershot of
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