Update Qualcomm (QCOM)
One chip in. One chip not quite in but closer. Between the two maybe this stock has finally achieved some upside momentum.
Two big announcements in the tech world with Qualcomm (QCOM) near the center of both.
First, Google (GOOG) announced its new Google-branded smartphone today, the Nexus One. The phone, made by Taiwan’s HTC, the maker of its own Google Android phones Hero, Magic and Tattoo, uses Qualcomm’s ARM 1 GHz Snapdragon processor. This is a real breakthrough for Qualcomm: It’s the first time the company has got its Snapdragon into what I’d call a big market share phone. (The phone is available on T-Mobile now and will be available on Verizon (VZ) and Vodafone (VOD) in the spring.)
The stakes here are immense since everyone and their Aunt Minnie are aiming at the market for fast, powerful, and low-power chips for the smartphone market. A short-list of competitors includes Texas Instruments (TXN), Marvel Technology Group (MRVL), and Nvidia (NVDA).
Second, Qualcomm has inched closer to putting a chip inside Apple’s (AAPL) iPhone. The Trojan horse here is Qualcomm’s FLO TV service. A new version of Morphie’s popular case for the iPhone (popular because it contains an extra battery) will include a FLO TV antenna so that FLO TV can stream live broadcast TV from Qualcomm’s dedicated mobile TV network onto an iPhone via a FLO TV app. Broadcast channels include mobile editions of ABVC, CBS, MBC, FOX, and others. The streaming service will cost $9 a month.
This doesn’t yet get Qualcomm where it wants to be—inside the iPhone—but it is a step forward. FLO TV has been around for a while without garnering much attention since it wasn’t included with any top-of-the-mindshare phones. Being in a Morphie iPhone case isn’t exactly in an iPhone but it does get Qualcomm close to an iPhone and the association will have some rub-off effect.
Qualcomm is a chip maker and the goal remains not its mobile TV on the iPhone but a chip to play mobile TV in an iPhone. That’s still a way off but closer than it was yesterday.
Qualcomm looks like it finally decisively broke above its 50-day moving average in the week before Christmas. On As of January 5, 2010 I’m tweaking my target price a bit. I’m raising it to $56 from the current $55 and leaving the schedule at March 2010.
Full disclosure: I own shares of Qualcomm in my personal portfolio.
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If you like QCOM you should check out IDCC.
Similar Patent model as QCOM w/o the chips.
IDCC currently has $10.00 in cash with virtually no debt and $3.00 more expected in the first 6-7 months of 2010 from current licenses.
They are expected to earn a min of $2.50/share next year and and are trading in the $27.00 area.
The only negative is the on going battle with getting Nokia to start paying for 3G similar to the problems QCOM had.
Apple, Rimm, LG, Samsung, HTC, Pantech, NEC, and more are all paying for the use of IDCC’s patents simlar to QCOM. They currently have 55% of the 3G market under license with the goal being 100% and expansion into M2M and bigger wireless pipes for more Data. I think they are the best wireless play for capital appreciation and I do own shares.
Hi, I’m new here and have a bonehead question. I noticed in the last performance review Jim mentioned he wasn’t fully invested and consequently had lower returns. Are picks each weighted equally and how many picks constitute a 100% invested situation? If these questions are answered elsewhere, please direct – thanks.
I’m going to have to side with dndodd on this one. Just based on a cursory glance at the financials of both companies, IDCC seems like the better play. Also, the Google phone is not getting great reviews in the press. Add in the fact that T-Modile is an “also ran” cell phone company, and the prospects for QCOM look even worse, although the addition to Verizon does give some hope for it.
salmoned. There are no boneheaded questions here so don’t be shy about asking. I’ll try to give you the best answer I can and others can correct me if I am wrong. My understanding of not being fully invested is that he has some of his capital in cash on the side and not invested in equities. Therefore, when the calculation of returns is made using total investment funds, the result is lower than if you just used the total of funds invested. I think the reason he wasn’t fully invested was because of the risk of a correction in stock prices (which by the way still exists). He wanted to have some cash to use to buy stocks at the lower prices available during a correction. As you know, this is all about buying low and selling high. So the best returns go to those who can buy during a correction or any stock market dive and wait for the recovery. This doesn’t include “momentum” investors who ride a stock up and get out before it goes down again and other strategies. I hope this helps.
Okay, but the ‘picks’ lack crucial information when portfolio and idle cash percentages aren’t also listed. How can we vet the stats? (Not that I doubt Jim’s honesty, of course)
Don’t get me wrong, I’m not looking for a tag-along-with-Jim portfolio. I appreciate and learn from the investing concepts presented here and I do buy an occasional pick (sometimes I already own a new pick – love that confirmation of concept). I simply want to understand the ‘nuts and bolts’ behind the performance stats and investment strategy.
salmoned. Its not something I worry about too much. As I wrote in another comment, following his advice on buying and selling Corning over the past few months I made 34% but he reported making 25%. The investment strategy is explained in his articles and the performance is pretty much up to the reader to capture on his or her own. Good luck with your investments.
You’re right. I’m not a market timer – I was fully invested through bottom (wishing I had some extra cash to put in) and have been since (almost back to my all-time high of 2+ years ago). I’d be nice to know Jim’s cash position at a glance, but it isn’t essential.