Qualcomm's Growth Goes Beyond Phones

Qualcomm fans are jazzed by a plump pipeline of processors, iPhones, tablets and 4G chips.
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) -- Like it was the tech-boom era all over again,


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served up an old-fashioned beat and raise of Wall Street expectations Wednesday.

Qualcomm shares soared 9% after the report and remained up 6% Thursday as investors cheered the wireless tech revival.

Strong sales of communications chips and a bounty of royalty collections helped drive Qualcomm's performance amid an increasingly hot smartphone market.

But beyond phones, Qualcomm has some other irons in the white-hot wireless bonfire, like dual core SnapDragon processors, 4G chips, an emerging tablet business -- and, even more immediate, the


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iPhone for


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The strength of smartphone demand came as a surprise, even to Qualcomm.

"We continued to see very strong shipments of smartphones," said Qualcomm chip chief Steve Mollenkopf on an earnings call with analysts. "A little bit more than we even thought a couple of quarters ago."

The surge has some CDMA iPhone number built in that certainly opens a big new market, but it also caused Qualcomm to warn that inventory levels would be rising.

"We believe at least some of the inventory build this quarter is a result of shipping CDMA chips into

contract manufacturers




ahead of the eventual CDMA iPhone launch in 2011," Morgan Stanley analyst Ehud Gelblum wrote in a research note Thursday.

As other analysts have said, that they expect Qualcomm to

supply chips to the Verizon iPhone

in January and also to the so-called world-phone iPhone 5 due out in June or July. According to the speculation, Apple will use Qualcomm's dual-mode CDMA/WCDMA chip so that the next iPhone works on all U.S. and European networks.

The iPhone 5 will be a 3G phone, but 4G devices are just around the corner, said Qualcomm.

"I think you'll see a big push

in 4G on more handset and other connected products, probably around the timing of CES," said Mollenkopf, referring to the Consumer Electronics Show scheduled for January.

Some of those connected products will be tablets, a sector that represents a sweet combination of processors and wireless chips for Qualcomm. The opportunity is big enough for Qualcomm to have placed a cap on the amount of money it will collect from tablets so the prices can remain low and the market can develop.

Qualcomm would like to extend its smartphone gains to the tablet category and keep rival


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hand out of the business. Mollenkopf told analysts that the next version of SnapDragon dual-core processors have collected some design wins.

"We have today over 10 different companies designing tablets on our dual core solutions," Mollenkopf said, according to a


transcript of the call


But not everything was golden in Qualcomm's big September quarter. The company wrote in its annual report Wednesday that due to a "whistleblower's allegations" in December, the Securities and Exchange Commission has started an investigation into accounting practices.

Qualcomm says its board's audit committee didn't find anything at the end of its own investigation and that it is cooperating with the SEC.

--Written by Scott Moritz in New York.>To contact this writer, click here: Scott Moritz, or email: scott.moritz@thestreet.com.To follow Scott on Twitter, go to http://twitter.com/MoritzDispatch.>To send a tip, email: tips@thestreet.com.