Semiconductors are materials that conduct electricity and are found in many different electronic products. They are an important part of the telecommunications industry—a sector that allows for communication through phones, tablets, and the internet. Companies in this space are responsible for designing, manufacturing, and supply other corporations with software, technology, and infrastructure to make this all possible. One of these companies is Qualcomm, a multinational corporation. Read on to find out more about Qualcomm including its main business units, financials, and its main competitors.

Key Takeaways

  • Qualcomm is a multinational corporation known for designing and manufacturing semiconductors and wireless telecommunications products.
  • Qualcomm has three main business units—Qualcomm CDMA Technologies (QCT), Qualcomm Technology Licensing (QTL), and Qualcomm Strategic Initiatives (QSI).
  • The company competes with Huawei, HTC, Nokia, and Samsung in mobile phone technology and MediaTek and Samsung in the semiconductor market.
  • Qualcomm's main competitors in its strategic investment segment include IBM, Hewlett-Packard, Dell, Google, Broadcom, Texas Instruments, and Nokia.

Qualcomm: An Overview

Qualcomm (QCOM) is known for designing and manufacturing wireless telecommunications products. The company was founded in 1985 by seven people. Headquartered in San Diego, it has more than 41,000 employees in more than 170 offices in 40 different countries.

The company is headed by Steve Mollenkopf—the company's chief executive officer (CEO). He also serves on the company's board of directors. Before assuming the role of CEO, Mollenkopf served as the company's president and chief operating officer (COO). He has worked for Qualcomm in a number of other positions as well and started out as an engineer. Mollenkopf has been instrumental in leading the company's development of 5G wireless technology.

Qualcomm came in the 137th spot on Fortune's list of top 500 companies in 2019—four spots lower from the previous year. The company falls between Penske Automotive Group and biopharmaceutical company Bristol-Myers Squibb.

Financials

The company reported revenue of $24.3 billion at the end of the 2019 fiscal year. That's a 7% increase from the previous year which saw revenue come in a $22.6 billion. The company's shares closed at $61.19 on March 18, 2020, and the company had a market capitalization of $73.4 billion.

The company settled a royalty and patent lawsuit with Apple and its contract manufacturers in April 2019. Apple (AAPL) sued the company in 2017 for $1 billion, saying Qualcomm overcharged for chips. Apple also accused the company of not paying rebates. All parties involved agreed to dismiss any outstanding litigation and settle before opening arguments began in court.

Qualcomm's settlement with Apple resulted in $4.7 billion in licensing revenue in April 2019.

Segments

Qualcomm competes in three main revenue segments:

  • Qualcomm CDMA Technologies (QCT) which sells the company's products and services
  • Qualcomm Technology Licensing (QTL) which is the company's patent licensing side of the business
  • Qualcomm Strategic Initiatives (QSI)—the side of the company that makes strategic investments

Qualcomm has one other revenue segment—referred to as its other segment. This division consists of the odds and ends that don't fit neatly into its other business units.

Products and Services

Qualcomm's QCT business segment designs and provides software and other technologies that are used in smartphones and other devices including tablets, gaming devices, laptops, routers, data cards as well as consumer electronics and vehicle entertainment systems. This segment competes directly with major names including Huawei, HTC, Nokia and Samsung in mobile phone technology. It also competes with the likes of MediaTek and Samsung in the semiconductor market.

Strategic Investments

Through its QSI segment, Qualcomm invests in a series of early-stage companies in a range of different industries including—but not limited to automotive, internet of things (IoT), mobile, data center, and healthcare.

Qualcomm competes fiercely with traditional personal computer and hardware designers and manufacturers such as IBM, Hewlett-Packard, and Dell. The company also faces competition from internet conglomerates like Google. Other competitors in this space include Broadcom, Texas Instruments, and Nokia.