iPhone 6 success will boost Qualcomm
Qualcomm (QCOM) has long been a supplier to Apple’s (AAPL) devices and has supplied various chipsets for its different versions of the iPhone and iPad. Apple is a strong player in the smartphone and tablet market, and it plans to introduce the iPhone 6 in August this year. The most important feature that Apple is likely to introduce with the iPhone 6 is the larger screen size for the two models that it plans to release.
Lately, a trend for bigger smartphones has emerged in the mobile phone market. Consumers have started to demand larger-sized smartphones, as they find bigger screens more engaging and vivid for viewing photos and videos. Plus, carrying a larger smartphone avoids the need to carry both a smartphone and a tablet. The iPhone 6 is also expected to have a Touch ID fingerprint security system and it’s also expected to be compatible with near-field communications (or NFC) technology. With these attractive features, the iPhone 6 is most likely to be a success, which will help Qualcomm.
Qualcomm could leverage mobile phone and tablet market growth
As the chart above shows, the tablet and mobile phone market is expected to grow at a decent pace. According to another report from IDC, the worldwide smartphone market could grow from 1.20 billion in 2014 to 1.74 billion in 2018 at a CAGR of 10%. According to Strategy Analytics, Qualcomm is the dominant player in the cellular baseband processor market, with a revenue share of 64%. It’s followed by MediaTek, Intel (INTC), Spreadtrum, and Broadcom (BRCM) in this market.
The PC market, on the one hand, is expected to decline from 299 million in 2013 to 268 million in 2015. Intel dominates the PC chipset market, and only AMD (AMD) is a decent competitor to Intel in this market. However, the declining overall PC market doesn’t give much advantage to Intel. On the other hand, Qualcomm is ready to leverage the mobile and tablet market growth and doesn’t lose much by not having any presence in the PC chipset market. Plus, better-than-expected sales of the iPhone 6 could boost Qualcomm’s fortunes.
To learn more about the upcoming iPhone 6, check out the Market Realist series Apple is expected to introduce some attractive features in the iPhone 6.