NEW YORK (TheStreet) -- A big deal was made when, in the April quarter, Qualcomm (QCOM) management issued guidance that was below Street expectations. Investors immediately began to panic, suggesting Qualcomm's reign over the chip industry was coming to an abrupt end. There were also rumblings about threats to Qualcomm's chipset margins, which had come under pressure.It was clear that the average selling price (ASP) of mobile devices were not as stout as they once were. After two years of strong growth, prices were beginning to come down, spurring more investor anxiety about high-end device saturation. This had a direct impact to not only Qualcomm, but also rivals including Broadcom ( BRCM). But even though shares of Qualcomm had fallen almost 10% since reaching a high of $67.65 in April, I never believed that it was time to worry. What I have always known is that, despite how weak the numbers look, Qualcomm's results were always better than the closest rival. With each passing quarter, there were no debate that Qualcomm is still winning the device battles by a greater margin. This means that as long as the mobile devices race continues between Apple ( AAPL) and Samsung, Qualcomm wins either way. And this recent quarter, during which Qualcomm posted 35% year-over-year revenue growth, was a perfect example. TXN), which posted nearly a 9% decline in revenue, making this now the seventh consecutive quarter of year-over-year declines. But despite the stark contrast in operational performance, Texas Instruments still enjoys a P/E that is four points higher than Qualcomm, which suggests that investors are still expecting more from Texas Instruments.
Without question, the pursuit for mobile device supremacy is the hottest battle on the market today. But Texas Instruments has exited that business altogether. I think it's a mistake for investors to discount Qualcomm's long-term potential based on near-term headwinds. Plus, let's not take for granted that Qualcomm continues to reinvest heavily in research and development. Management wants to make sure that Qualcomm's chip technology remains the top choice for not only Apple, but also Samsung and anyone else that is looking to grow market share. What's more, given that Apple is rumored to launch several new devices later this year, presumably a cheaper iPhone and a new iPad, Qualcomm should see more market share gain over the next couple of quarters. The key here, though, is the cheaper or "budget" iPhone, as it is often referred. Unlike, Broadcom and say, Nvidia ( NVDA), Qualcomm has built a smartphone chip that works on multiple frequencies at the same time. This has been one of the hiccups rumored to prevent Apple from taking advantage of growth opportunities in China. With Qualcomm's chip and a budget iPhone, I have to expect that for both companies, the best is yet to come. Follow @saintssense This article was written by an independent contributor, separate from TheStreet's regular news coverage.