Qualcomm will report its fiscal first quarter results Wednesday and appears to be the chipmaker with all the wind at its back.
The company is expected to report earnings of $1.13 a share on revenue of $5.9 billion for the first quarter. But the main takeaway is that Qualcomm is largely running away with the smartphone and tablet field. Analysts are openly wondering if there's any competition for Qualcomm.
For instance, Piper Jaffray analyst Auguste Gus Richard sees a lot of green field for Qualcomm. Qualcomm's edge is only likely to grow given the following:
- New smartphones from Samsung and HTC are on tap.
- Mobile World Congress will bring a bevy of tablet and smartphone design wins.
- China is a large untapped market for Qualcomm and the country has a GSM migration rolling.
- Qualcomm has an LTE chipset lead and is capitalizing.
We also expect strong guidance for the March quarter, above normal seasonality on the back of strong royalties from LTE smartphones and tablets sold in CQ4. Additionally we see chip market share gains in handsets sold around Chinese New Year. With TI exiting the apps processor business, ST-Ericsson in disarray, Intel struggling at the high-end, and Broadcom far behind Qualcomm, the only competition is Mediatek at the low-end. While internally-sourced apps processors at Samsung are a threat, Samsung is not competitive in modems and lacks scale in chip design of Qualcomm.
Other analysts also noted the China connection for Qualcomm. In China, Mediatek is a threat, but its LTE chipset won't ship until early 2014 for sampling. "Qualcomm has made China a priority over the last few years and our checks indicate that Qualcomm is increasing their focus on the geography," said Deutsche Bank analyst Brian Modoff.
In addition, Qualcomm is likely to gain from smartphone and tablet sales overall. Morgan Stanley analyst Ehud Gelblum said:
We believe demand for smartphones and tablets is likely to surprise to the upside in CQ4, as evidenced by Corning having raised its Gorilla Glass guidance for Q4 in late November, while 3G/4G device ASP could also surprise to the upside based on recent high-end LTE and “phablet” model launches (with the Samsung Galaxy Note 2 potentially topping 8M units globally in 4Q12).