Qualcomm Leads Smartphone Chipset Market

According to a recent report of research firm Strategy Analytics, Qualcomm Inc. (QCOM) — globally the largest manufacturer of smartphone chipsets — continues to dominate the smartphone applications processor market through its 54% market share in terms of revenues.

Notably, Apple Inc. (AAPL) and Mediatek hold the second and the third position with respective market share of 16% and 10%. However, Intel Corp. (INTC) which holds the top spot in the overall semiconductor industry continues to disappoint its smartphone chipset business with a mere 0.2% market share. At the end of 2013, the worldwide smartphone applications processor market reached $18 billion, with an annual growth of 41%.

Qualcomm exited the first quarter of fiscal 2014 with nearly $6.6 billion revenues out of which its Qualcomm CDMA Technologies segment contributed $4.6 billion revenues, up 12% year over year. Moreover, the company shipped nearly 213 million CDMA-based MSM chipsets, up 17% year over year.

Qualcomm’s Snapdragon 800 quad core chipset is in high demand and is widely used in high-end smartphones as it supports 3G/4G LTE modem with ultra HD graphics, enhanced battery life and clock speeds of up to 2.2 GHz per core. Moreover, the company’s Snapdragon 400 and 200 flagship processors are hugely popular among mid-range smartphones.

At the end of 2013, nearly 200 million subscribers were using LTE services in 101 countries. Such aggressive deployment of LTE networks coupled with increased usage of smartphones and tablets will help Qualcomm maintain its leading position in the smartphone applications processor market. Revenue wise, the company already holds the top spot with more than 60% of LTE market share in 2013.

Currently, Qualcomm carries a Zacks Rank #3 (Hold).

Other Stocks to Consider

A better-performing stock in the industry is ShoreTel, Inc. (SHOR) with a Zacks Rank #1 (Strong Buy).

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