1. How to use GuruFocus - Tutorials
  2. What Is in the GuruFocus Premium Membership?
  3. A DIY Guide on How to Invest Using Guru Strategies
Articles (42) 

Qualcomm and Intel Are Fighting in This Lucrative Market

July 23, 2014 | About:

Qualcomm (NASDAQ:QCOM) has been the leading player in smartphone chips, crushing the likes of Intel (NASDAQ:INTC). Be that as it may, with the smartphone business sector heading for saturation, both these players are taking a gander at new areas to drive development. Give us a chance to examine the diverse areas where these two chip giants are battling, separated from smartphones, and attempt to figure out the victor.

Future homes another business for chip manufacturers

Qualcomm and Intel will positively be influenced by the smartphone market's saturation. The value war and the saturation of the business have headed Qualcomm and Intel to focus on various different devices and gadgets used in family rooms and homes. Since smartphones are heading for saturation in numerous experienced markets, the profit margins of smartphone manufacturers are shrinking and this also has effects on various chip manufacturers. Qualcomm, in 2013, made major revenue through selling chipsets for wireless devices such as smartphones and tablets, so it needs to diversify.

In 2013, Qualcomm increased its chipset portfolio focused at segments other than smartphones and tablets, with the center range of fixation being devices in the parlor. The HD processor of Qualcomm has empowered the organization to investigate the business sector of devices like Smart Tvs, set top boxes, advanced media adaptors.

Qualcomm as of late advertised the presentation of its smart door stage, which is an amalgamation of its system processing force and Wi-Fi limit with shrewd systems to make a smart home stage. This will help Qualcomm establish its market in home securities, medicinal services, furthermore single home vitality use. The business for smart homes is estimated to develop at a CAGR of 17.74% from 2013 to 2020, and is required to be worth $51.77 billion by 2020. Thus, in this possibly gigantic business sector, Qualcomm is looking to take advantage of the open door in front of it.

More catalysts and rivalry

In-car entertainment ((infotainment)), also known as ICE, is also taking off. Chipmakers like Qualcomm and Intel foresee an enormous market in this segment. Analysts have estimated that the ICE business sector will develop at a CAGR of 12.1% from 2011 to 2016, so both Intel and Qualcomm are battling it around here as well.

Qualcomm is focusing on the automobile market with its Snapdragon 602a. This chipset is designed to improve infotainment systems in future cars. The Snapdragon 602a features additional cores, which makes it a favored decision for automakers to enhance sound, feature, and communications.

Intel has been focusing on the infotainment advertise as well. Worldwide automobile leaders such as BMW, Jaguar Landover, and Toyota are key clients of Intel for various instrumentation services used in their cars. BMW uses Intel engineering for its professional navigational system.

Intel is using its IVI ((In-Vehicle Infotainment)) innovation to focus on the automobile market. The iota processors of Intel give major infotainment solutions in cars and automobiles. These particle processors are designed to convey high proficiency with ease for IVI solutions. These processors give larger amount of I/O adaptability, emphasizing coordinated 3d graphics feature encoder and decoder with memory and display controllers. These processors have a stable operation in extensive variety of temperatures (-40°c to +85°c), making them very viable.

Thus, we see that both Qualcomm and Intel are looking to have a pie of the smart homes and automobile market. Nonetheless, we have to see which one is a superior investment.

Major comparison and conclusion

Intel trades at an exceptionally shabby 13.5 times earnings while Qualcomm is more expensive at 19.3 times earnings. Then again, Intel still generates a substantial parcel of its revenue from the slumping PC market, which is the reason its earnings development estimate for the following five years is just 5% per year. Qualcomm may be expensive when contrasted with Intel, yet the organization is profoundly dug in into versatile and is looking to diversify further. In addition, its earnings development desire of 16.67% is more than thrice of Intel's earnings development desire, making it a solid pick for what's to come.

Rating: 0.0/5 (0 votes)


Please leave your comment:

Performances of the stocks mentioned by rsconsultant

User Generated Screeners

mjspencermmm screen
browntroutFwd PE <=9, Gross Margin >= 25
gelayor65All Stocks With Blackrock Heav
jan.ellsbergerHernhag rev5
jan.ellsbergerHernhag rev4
jan.ellsbergerHernhag rev3
jan.ellsbergerHernhag rev2
BoubaPFS Value Sector
Get WordPress Plugins for easy affiliate links on Stock Tickers and Guru Names | Earn affiliate commissions by embedding GuruFocus Charts
GuruFocus Affiliate Program: Earn up to $400 per referral. ( Learn More)

GF Chat