INTC), NVIDIA ( NVDA) and Texas Instruments ( TXN), have been hurt by (among other things) weak demand, but on Wednesday Qualcomm beat estimates for revenue and earnings. It also did what few rivals have been able to do: raise guidance.
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?