Qualcomm (QCOM) has for a great number of years been on the forefront of developing new technology and incorporating it into cell phones. With the growing popularity of smartphones the world over, Qualcomm has indeed had the chance to show its prowess in this highly evolving field with competitors such as Samsung, Apple (AAPL) and the Nokia corporation (NOK). The question that many of Qualcomm’s shareholders find themselves facing is whether it will be strong enough to beat stiff competition from rivals and maintain its rightful place in the smartphone niche. If I was a betting man, I would bet that Qualcomm does indeed have the capability to not only remain relevant in the industry but also make far greater strides in their future innovations. Looking at the current trends in smart phone technology, Qualcomm has been a leader in wireless technology for quite some time, which although having been great for them, may prove to be their Achilles heel. I’m very sure that many will be wondering why I say this but in light of recent events, I have been inclined to make this observation.
The new team to take on Qualcomm
Qualcomm should gear up for tough times ahead due to the fact that some of its longtime rivals have now joined forces to develop their own wireless enabled smartphones and tablet PCs. Japanese tech titans NEC, Fujitsu and DoCoMo (DCM) have teamed up to form a new company known as Access Network Technology which will be the vehicle used to develop the 3G and 4G chip technology. This basically means that the company will enjoy a home ground advantage that will ultimately result in edging Qualcomm out of the Japanese tech market. By doing so, the projected loss in revenue will deal Qualcomm a massive blow which may cripple it should effective countermeasures not be taken. Qualcomm, which is currently the leader in smartphone chips development globally faces a major threat from this new company since all the partners have already worked together in the past with extremely worthwhile results. Qualcomm will thus have to look for a way to gain an edge over these competitors in order to ensure that their collective goal, which is to capture 7% of the market share by 2014 as stated by Fujitsu, is not achieved.
Could Qualcomm’s diversification be the answer?
One of the strengths that Qualcomm has exhibited over the years is the ability to quickly adapt to new trends, which has made me a firm believer in it. The recent move to venture into the development of Qualcomm Halo, a wireless electric vehicle charging technology that is still in its trial phase is without doubt just what it needed. Qualcomm has again proven its ingenuity in the field of technology and as such critics should not be so eager to write it off. Late last month Qualcomm announced a memorandum of understanding with regards to their intention of having Renault, one of the most renowned car manufacturers, take part in the trials. Renault, which has been on the forefront of pioneering electric vehicle technology, will without a doubt prove to be the best match for Qualcomm as it also has a proven track record in exceptional innovations. For the environmental conservation groups, this is great news, since this development shows that more effort is being put into creating more eco-friendly technology. Should this technology go into mass production, Qualcomm will undoubtedly become the leader in the tech markets leaving the likes of Apple, Google (GOOG) and others in its rearview mirror.
For those who may still be unconvinced of the bright future that lays ahead for Qualcomm a little bit of information may change their mind. Qualcomm has been a leader in both 3G and next generation wireless technology for over 25 years and has heavily influenced the trends of smartphones and other devices that make use of wireless technology. I believe that Qualcomm has the ability to continue coming up with far better innovations that have been synonymous with its brand name regardless of the competition it faces from its rivals. Reports indicate that Qualcomm beat analyst’s expectation with earnings from its 3rd quarter, which to me is a sure sign of progress.
About the author:
Muhammad BazilMuhammad Bazil is a financial journalist and editor for a variety of websites, public policy organizations, and book publishers. He has written hundreds of published articles and blog posts on topics including budgeting, credit management, real estate and investing. His articles have been featured on the homepage of Yahoo!, MSN and numerous local news websites.