Qualcomm Inc. ( QCOM ), the largest chipset manufacturer for mobile handsets, recently announced its intention of diversifying its business platform by offering complete wireless solution to medical device users through its subsidiary, Qualcomm Life Inc.
Qualcomm Life's maiden offerings, the 2net™ Platform and Hub for wireless medical devices, are now available in the U.S. and are designed to interconnect wireless medical devices via cloud-based solutions. The applications enable device users, health care providers and caregivers to easily access biometric information. Both the platform and hub facilitate transfer, storage, conversion and display of medical device data.
These facilities will certainly benefit medical device manufacturers, who often face technological glitches as well as higher operational expenditure. The company claimed that the new technology has already started gaining massive popularity. The company also revealed that more than 40 medical device manufacturers are either ready to adopt this new technology or may integrate it later.
Earlier, Qualcomm reported robust fourth quarter 2011 results. Net income increased 22% year over year and 2% sequentially, reflecting the company's enhanced operating efficiency Strong performance of Snapdragon chipset platform and accretive product diversification strategy were positives for the company in the quarter and induced management to raise its fiscal 2012 outlook.
Qualcomm benefited from the growing popularity of Google Inc. ( GOOG ) developed Android-based 3G smartphones. Qualcomm's next-generation Snapdragon processors are generally integrated in Android-powered 3G smartphones. The huge success of Apple Inc. 's ( AAPL ) iPhone 4S was also positive for the company.
Qualcomm received a shot in its arm from Microsoft Corp's ( MSFT ) upcoming Windows 8 operating system. The two entities are collaborating to develop chipsets from Snapdragon platform for notebook and tablets using the Windows 8 operating system. In addition, Qualcomm's Gobi mobile Internet connectivity solutions will provide 3G/4G LTE connectivity to these devices. With this, Qualcomm has become the sole chipset developer for both Windows smartphones and Windows notebooks.
We, thus maintain our long-term Neutral recommendation on Qualcomm. Currently, it has a short-term Zacks #3 Rank (Hold rating) on the stock.
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