Qualcomm's the Play on Smartphones

How good/bad was Research In Motion (RIMM - commentary - Trade Now)? That may not matter. Maybe the question is, "How good is the competition?" In the next few months we are going to see gigantic launches from Motorola (MOT - commentary - Trade Now), Palm (PALM - commentary - Trade Now), Samsung and Nokia (NOK - commentary - Trade Now) on top of Apple's (AAPL - commentary - Trade Now) iPhone. I believe the Nokia launch in particular must be taken seriously (as Robert Bruggeworth, the CEO of RF Micro Devices (RFMD - commentary - Trade Now), a big supplier of power amplifiers, confirmed last night on "Mad Money").

As far as yesterday's quarterly report, RIMM did miss on every important metric. They generated an unimpressive amount of cash and blew through a ton of it. The additions were disappointing, the average selling price is going down, perhaps collapsing from the coming competition, so I don't trust the bountiful gross margin guidance. I think that a lot of the demand was simply replacing existing shelf space and was not incremental sales.

It is true that the quarter's "EPS" were better than expected. At the suggestion of Rick "Top Gun Trader" Bensignor, I had suggested cutting the RIMM position in half. That was a dollar above $80.

I am thinking that if you can get out above $75, you should take it. The best way to play smartphones going forward is with Qualcomm (QCOM - commentary - Trade Now), which will be in all of the competitors and will have the best growth of all of these companies, suppliers and handsets ... with the possible exception of Apple.

Random musings: Great stuff from Dan Dicker lately on the endless bid underneath oil and gas. ... Good idea from Doug on the possibilities of Hartford (HIG - commentary - Trade Now) and Lincoln National (LNC - commentary - Trade Now) here. I know I like them more now that they are fully financed. ... A propos of Don Dion's work, I think the U.S Natural Gas Fund (UNG - commentary - Trade Now) is driving the underlying commodity today.

At the time of publication, Cramer was long Qualcomm.

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