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Qualcomm Grows Where Others Can't

For instance, the company's chips hold slots in phones from Apple (AAPL), Google (GOOG), Nokia (NOK), Samsung and Microsoft (MSFT).

Rivals will find it pretty challenging (if not) impossible to make a meaningful dent in this business, especially as Qualcomm continues to reinvest in R&D to ensure that its chip technology remains the top choice among these phone rivals.

What's more, Qualcomm is able to enjoy all of this success and yet still has a very lucrative licensing business, which continues to be underappreciated.

All of this said, I do wonder whether rivals such as Broadcom (BRCM) and NVIDIA can become future threats to Qualcomm's business.

NVIDIA has been making great strides in securing new business from some prominent companies. Its Tegra 3 chip has become a key component inside both Microsoft's Surface tablet as well as Google's Nexus 7. What's more, as Nvidia is shoring up its footing in the realm of mobility to compete more effectively, Nvidia still has not forgotten its PC roots. Should Qualcomm be concerned?

Bottom Line

I love Qualcomm's business. Surprisingly, the company rarely gets mentioned in discussions of the best-run companies in the market today. Moreover, the company is in a fast-growing mobile market, which has yet to peak.

With management raising revenue guidance, there is a chance that fiscal 2013 might be an even bigger year for Qualcomm. From that standpoint, I would be adding shares at current levels until the company shows meaningful signs of slowing growth.

At the time of publication, the author was long AAPL.

This article is commentary by an independent contributor, separate from TheStreet's regular news coverage.
Richard Saintvilus is a private investor with an information technology and engineering background and has been investing and trading for over 15 years. He employs conservative strategies in assessing equities and appraising value while minimizing downside risk. His decisions are based in part on management, growth prospects, return on equity and price-to-earnings as well as macroeconomic factors. He is an investor who seeks opportunities whether on the long or short side and believes in changing positions as information changes.
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