Both Qualcomm and ARM are the foundations for mobile devices today and benefit from overall growth in the mobile devices markets, regardless which mobile device manufacturer (Apple, Samsung) achieves top market share.
Qualcomm supplies the baseband processor as well as licenses its technology for mobile companies to manufacture the processor.
ARM licenses the design architecture for mobile processors, including Qualcomm. ARM architecture is entrenched as the foundation for Qualcomm, Nvidia, Texas Instruments and Broadcom, for which it earns licensing royalties. Even a giant like Intel may not represent an in-road thread in Windows phones as ARM is compatible as well.
Some current statistics:
Qualcomm | ARM |
50% of smartphone application processor market | 90% of the smartphone processing market |
86% of market share in LTE cellphone modems | 31% market share in mobile computing |
| 60% market share in embedded systems. Embedded processors are the items that make everyday appliances “digital” such as home thermostats and vending machines |
Promising scenarios:
Qualcomm has developed a chip that is compatible with China Mobile’s proprietary TD-SCDMA technology giving it a leg-up to ride this growth to 3G on the network in China where only a 29% of the market owns a smartphone, suggesting great potential upside over time.
The risk of competition for both Qualcomm and ARM still looks an uphill battle for their competitors (Broadcom, Nvidia and Intel).
These technology companies that became platforms or ecosystems are not only sustainable but also, they turned into attractive long-term investments.
