The Qualcomm shares are American assets that you can speculate in online through a simple trading platform using CFDs. But to succeed in implementing an effective trading strategy on this share price on the stock markets you must of course be highly conversant about this company including its activities, its competition and possible partners as well as knowing how to achieve your fundamental analyses through studying the strengths and weaknesses of this group and detecting future challenges that could arise over the coming months and years. This is exactly what we offer you here in this article through some essential information and data.
General presentation of the Qualcomm Company:
The American company Qualcomm, based in San Diego, California, is a company specialised in the design, development and sale of software and CDMA systems worldwide. To better understand the range of activities of this technological group we can separate the products sold by Qualcomm into two sub-categories according to the turnover generated by each as follows:
- Firstly, the sale of communications systems represents the major part of the company’s activities and in fact generates 74% of the total turnover of Qualcomm. This concerns mainly the CDMA systems such as integrated circuits, software and voice transmission and data systems as well as software in the multimedia sector. Also in this sector we find wireless communications and internet access systems with products mainly destined for the transmission of data, satellite communications and decryption.
- The 25.3% remainder of Qualcomm’s turnover is generated by the sale of licenses and permits for manufacturers that use Qualcomm technologies such as CDMA in the creation of their products.
From a geographical point of view, the activities of the Qualcomm Group are spread around the world. In fact, although this group is actually based in the United States, this company only achieves 2.3% of its turnover there. China is in fact one of the major markets of this company with 65.4% of its turnover and North Korea is in second position with 15.9% with the rest of the world providing 16.4% of its turnover.
Know the competition of Qualcomm shares:
The American Group Qualcomm is actually one of the international leaders in its activity sector. However this is not the only company trying to increase its share of the profitable IT software and equipment sector. In fact, Qualcomm has to face significant competition worldwide from major groups and companies including the following, classified according to turnover.
- Intel Corporation: Also based in the USA, this company is actually the leader in this market notably due to its semi-conductors.
- The Korean group Samsung: This group is in second position of this classification and is also the world leader in high tech industrials.
- TSMC: In third position we find the Chinese group, TSMC, notably specialised in the graphics chips sector.
- Broadcom: Another American company is in fifth position in this global classification, this is the Broadcom Company.
- Hynix: The South Korea based company Hynix is in sixth position.
- Micron: Then comes the Micron Group which holds seventh position in this list.
- Texas Instruments: In eighth position is the American group Texas Instruments.
- Toshiba: In ninth position we find the Japanese company Toshiba.
- NXP: Previously a Philips subsidiary based in the Netherlands, NXP is in tenth position and the last in this classification.
The strategic alliances implemented by the Qualcomm Group:
In order to position itself among the leaders of this activity sector, the Qualcomm Group focuses above all on technological and innovative developments as well as counting on its ability to implement solid and beneficial alliances and partnerships with other companies around the world. Here then are some examples of recent partnerships that the group has implemented.
- Apple: Since 2011 for example Qualcomm has been in a particularly beneficial commercial alliance with the Apple Group. It supplies the latter with all the microchips that are used on the iPhone mobile telephones. However, certain rumours hint at the possibility that this long term partnership may be reaching its end, Apple will probably turn to Intel in this case for the creation of its next mobile phone series.
- Blackberry: Later, in 2017, Qualcomm decided to collaborate with the mobile telephone manufacturer Blackberry. The Blackberry Group had recently developed a virtual platform that enabled different operating systems to be used simultaneously which was named QNX Hypervisor and they decided to sign an agreement with Qualcomm to use their microchips in the design of its virtual interior control and electronic gateway systems as well as on its infotainment platforms.
- Samsung: Finally, in 2018, the Qualcomm group announced the renewal of its long term partnership with the Samsung mobile telephone manufacturer. This partnership, renewed for a non specified period which is undoubtedly for a number of years, will notably enable the company to concentrate on 5G technologies in the development of autonomous automobiles which is of course seen as one of the most promising sectors for the next few years. The two companies previously and notably collaborated on the development of the high end mobile microchips, Snapdragon 835 and Snapdragon 845.
The advantages and strengths of Qualcomm shares as a stock market asset :
- One of the main strengths of the Qualcomm group is, of course, its significant investment in research and development. This allows the group to benefit from a solid market base with companies that are constantly looking for more efficient or innovative IT components.
- Qualcomm can also rely on the durability of its contracts, which are generally signed on a long-term basis with major players in the technology fields and around the world. This, of course, gives Qualcomm excellent visibility into its results.
- The American group also generates a lot of its revenue from the patents it holds. To date, the company holds more than 12,600 patents as well as pending patent applications relating to the latest technologies developed by the company.
- Qualcomm also benefits from a certain ability to diversify its target customers and the format of its products. As a result, it effectively protects itself against the risk associated with a single target business area. In addition, in most of its target areas, Qualcomm enjoys a certain popularity and quality brand image.
- Of course, Qualcomm's positioning around the world is also appreciated, with a very strong presence in Asia in particular, which enables it to target the world's most powerful IT and technology companies.
- Qualcomm can also rely on its strong workforce and excellent corporate governance as it employs more than 25,000 people worldwide. Of course, it also benefits from a loyal customer base.
- Finally, investors and analysts in the industry also appreciate Qualcomm's strategy of partnerships and strategic alliances with companies in a wide variety of fields, which allows it to broaden its target audience and continually gain new market share.
Disadvantages and weaknesses of Qualcomm's stock as a stock market asset :
- First of all, despite its position among the leaders in its sector, the lack of diversity in the products developed by Qualcomm is regrettable. Indeed, apart from CDMA technologies, which Qualcomm has made its specialty, the group has a weak presence in other technological areas. This could, of course, have an impact on its ability to compete in a more diverse environment.
- Qualcomm also suffers from low brand popularity around the world. The group would need to invest more in international marketing in order to make its name better known to its target customers. Qualcomm's major competitors are benefiting from increased brand recall.
- In addition, Qualcomm's corporate stores may be considered obsolete or may need to be renovated and restructured to increase their profitability.