Qualcomm Incorporated QCOM recently announced that its subsidiary, Qualcomm Technologies International, Ltd. has launched QCC3026, a flash-programmable Bluetooth Audio System-on-Chip (SoC). Compared with earlier generation entry-level flash devices, the Qualcomm QCC3026 SoC helps to decrease the consumption of power up to 50%.
Earlier, the company had introduced the QCC5100 SoC, equipped to improve processing power, reception and support extended battery life of wireless earbuds. Designed for the phone manufacturers, this cost-effective version — Qualcomm QCC3026 SoC — enables phone manufacturers to produce their own set of wireless earbuds for low and mid-tier handsets. Supported by Qualcomm Broadcast, TrueWireless Stereo and Qualcomm aptX and cVc audio technologies, the new SoC brings seamless experience for its users.
Notably, based on the latest QCC3026 SoC with Qualcomm TrueWireless Stereo, OPPO recently announced its first wireless stereo earbuds.
Our Take
Qualcomm continues to retain its leadership in 5G, chipset market and mobile connectivity with multiple technological achievements and launches. The company’s improved and upgraded technologies will likely enable various firms to build new and updated products and services across the wireless ecosystem to better serve customers. Also, the company has signed multiple licensing deals with various Chinese smartphone makers including Xiaomi and Gionee Communication Equipment Co. Ltd.
Moreover, the company’s new products are likely to gain traction, particularly through original equipment manufacturer channel. Also, Qualcomm has a strong clientele serving more than 25,000 customers through its direct sales channel and global network of distribution channel partners. Such large client base enables it to tap opportunities and neutralize operating risks associated with a single market.
However, shares of the Zacks Rank #3 (Hold) company have yielded 2.1% in the past year, underperforming the industry’s average growth of 7.4%. Further, it recorded significant decline in licensing fees in second-quarter fiscal 2018 due to the ongoing dispute with Apple AAPL and other contract manufacturers. Headwinds from weaker industry conditions have also dented its margins.
Stocks to Consider
Some better-ranked stocks from the same space are Comtech Telecommunications Corp. CMTL and Ubiquiti Networks, Inc. UBNT. While Comtech Telecommunications sports a Zacks Rank #1 (Strong Buy), Ubiquiti Networks carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Comtech Telecommunications surpassed estimates in each of the trailing four quarters, with an average positive earnings surprise of 123.70%.
Ubiquiti Networks outpaced estimates thrice in the preceding four quarters, with an average earnings surprise of 8.88%.
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