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Qualcomm forecasts bright future

by on16 January 2018

Updated: Fending off Broadcom

The financial future for Qualcomm in FY2019 is bright, according to a statement the company released today.

It estimates that its share profit will fall between $6.75 and $7.50 in fiscal 2019 Non-GAAP earnings per share on revenues of $35 billion to $37 billion.

The forecast sent its share price up as the company believes that Qualcomm is currently dramatically undervalued. This is what Fudzilla was talking about a while ago, as it took a hostile attempt for a takeover for investors to realize that Qualcomm is actually worth more than the Street thought.  

Qualcomm, as Fudzilla has reported before, is rejecting a hostile takeover bid from Broadcom and seems, so far to have fended off the unwanted advances.

Even if the takeover did happen, it could take up to 18 months for regulatory approvals, setting the roadmaps and plans significantly back. The takeover would not benefit Qualcomm shareholders, it is designed to benefit Broadcom shareholders. More importantly, Qualcomm doesn't need any help to exectute the 5G roadmap that is going to create significant revenues for the company in the mobile, PC, IoT and automotive industries. 

The action plan includes plans to continue to grow the Qualcomm core business, a new $1 billion cost reduction program and extend attention to NXP acqusition and peace with Apple. 

The last two are very interesting as Qualcomm told shareholders that even if it doesn't manage to acquire NXP, it would use the money for a large share repurchase. The shareholders would have a clear win. Having Cristiano as a president brings a confidence that the Apple and any other legal battlers might settle in financial 2019 (September 30 2018). 

Overall, Qualcomm has good chances to grow even further in its core business including mobile phones. It has scored some of the rebellious customers from China including Meizu as a licensee and it is on the verge of entring a connected PC market. This can be a potentially important catalyst as Qualcomm could have much better battery life compared to its Intel competition. Let's not forget  that Qualcomm SoC have integrated 4G LTE X16 modem with Gigabit LTE support and the upcoming Snapdragon 845 has 1.2 Gbit modem and significantly faster CPU and GPU. 

The company has already announced a phone form factor for 5G designs that will help customers ship 5G enabled phones in 2019. The automotive business unit also managed to win Volkswagen for infotainment in early 2017 and has just announced Jaguar and Land Rover design wins, as well as Honda Accord 2018. It also pulled off a design in China with BYD. 

Qualcomm Low Power Bluetooth SoC QCC5100 will enable earbuds with TrueWireless Stereo, Qualcomm aptX HD audio, Integrated Hybrid Active Noise Cancellation (ANC) and third-party voice assistant services. All that will fit in your ear and play for aseveral hours. Qualcomm scored almost a 100 percent design wins with its Mesh - Self Organizing network technology that you see with many customers as router packs. This magical technology works great with Google routers, Orbi and a few other big names and currently doesn't have any competition. 

Overall 2018 looks to be a good year for Qualcomm and there is no way how Broadcom can benefit, and therefore the Qualcomm board urges its customers to stay away from Broadcom's offer. . 




Last modified on 17 January 2018
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