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Why Qualcomm Should Benefit from Partnering with Chinese Players

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Partnerships

Yesterday, Qualcomm (QCOM) announced in a press release that it, China Mobile, and Chinese (FXI) smartphone makers are partnering to develop next-generation 5G smartphones based on Qualcomm’s Snapdragon 855 processor. These smartphone makers include Xiaomi, OPPO, Vivo, OnePlus, and ZTE. In addition to supporting 5G technology, the Snapdragon 855 processor offers some more advanced artificial intelligence features.

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Our take

This is good news for Qualcomm. A collaboration with Chinese players indicates that the company is confident that the US–China trade war won’t have much of an impact on its performance. The partnerships should also help Qualcomm overcome competitive threats from Intel (INTC), which is developing its own 5G modems. Qualcomm stock has lost about 13% of its value year-to-date. But if its endeavors in 5G technology are successful, they could benefit the stock.

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