We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon
Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.
Will there be a end to the Apple/Qualcomm dispute?
The bitter rivalry between apple and the chip maker Qualcomm seems to be lengthy and quite damaging. so much so that it overshadowed Qualcomm's quarterly performance. Will Qualcomm manage to settle the legal battle with Apple? Take a look at Qualcomm's performance. alph.st
Qualcomm: Chips to power next-gen connectivity Qualcomm is under pressure due to a set of pending legal issues that includes an FTC antitrust suit and royalty disputes with Apple totaling claims of more than $1 billion. Its stock has lost roughly 15% year to date as these issues threaten its earnings and present potential long-term challenges for its business model. The chipmaker's stock now trades at roughly 13 times forward earnings estimates, which looks like an attractive entry point even in light of its legal troubles.
Qualcomm was one of the most influential players in the mobile revolution, collecting revenue on most cellphones and tablets sold by way of either having chips in the hardware or from licensing fees, and it's now in a position to play a big role in powering the Internet of Things. The company will likely be a leading supplier of mobile baseband chips (the hardware that mobile devices use for internet connectivity) for the next generation of devices that will connect through 5G network technology, which should boost sales volume and margins.
IMAGE SOURCE: QUALCOMM.
Qualcomm's expertise in high-performance, low-power-consumption processors will also likely give it an edge in IoT devices, including wearables, home appliances, mixed reality hardware, and drones. Connected cars present another big opportunity, with the company on track to become the leader in the space and expand its overall addressable market roughly 40% by 2020 if it closes its acquisition of NXP Semiconductors.
Looking at the income side of things, Qualcomm's dividend yields 4.1%, and the chip giant has boosted its dividend annually for 14 years running -- delivering an average annual payout increase of 17% over the last decade. With the company in acquisition mode, there's reason to think that it won't sustain that level of dividend growth. But it's already got a great yield, and its payout history suggests that investors can count on dividend increases going forward.
Sorry if this has been discussed ad nauseum. I'm new to the board and I just picked up shares today on this dip. Didn't Apple (and/or it's equipment providers) sign a contract with QCOM regarding the price of royalties? They may want to go to a new contract with new terms but surely QCOM will be entitled to this "missing" revenue at some point in the future, no? At one time AAPL must have thought the terms were fair. What am I missing?