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With smartphones and tablets currently holding center stage, manufacturers are busy churning out more and more of these devices every day. In the process, many companies that make the components used in these products are also reaping rich benefits. And one outstanding performer has been Qualcomm (Nasdaq: QCOM  ) .

Qualcomm's revenue has grown by a jaw-dropping 70%, from just $8.9 billion in 2007 to almost $15 billion last year, a big part of which can be attributed to its pioneering CDMA, or code division multiple access, technology division. But what's more interesting to me is that the company has a commendable 38.7% share in the $9.7 billion market for mobile baseband chips.

Riding the wave
In fact, the number of smartphone and tablet manufacturers using Qualcomm's chips reads like a who's-who of the industry. Apart from Nokia's Lumia range of smartphones, others such as Asus, Dell, HTC, Sony, LG, Samsung, Lenovo, and Motorola are increasingly making use of Qualcomm's chips in their upcoming devices. That's a heck of a lot of companies! And let's not forget the daddy of them all -- Apple (Nasdaq: AAPL  ) . The company's hugely successful iPad apparently uses Qualcomm's LTE chips and wireless modems. Incidentally, Qualcomm also manufactures the new iPad's quad-core A5X processor for Apple.

But Qualcomm's potential for growth does not end there.

The 4G angle
According to fellow fool Evan Niu, 2012 can be dubbed the year of 4G LTE. And Qualcomm isn't far behind when it comes to cashing in on this trend. Qualcomm possesses patents in 4G LTE and royalties should just be a natural outcome. But that's not all.

According to global research firm Strategy Analytics, Qualcomm was the leading supplier of the next-generation 4G baseband modems with a 43% market share in baseband chip sales for the third quarter. The research firm also predicts that worldwide LTE phone shipments for this year would hit 67 million units, a mind-blowing tenfold increase from 6.8 million units in 2011. That should give you a fair idea of the company's potential profits. And Qualcomm is gearing up for the future as well.

As leading Wi-Fi chip manufacturer Broadcom (Nasdaq: BRCM  ) puts it, the future is all about 5G. This new Wi-Fi standard (as Broadcom prefers to call it), technically known as 802.11ac, would be able to beam your data up to three times faster than the existing technology. And Qualcomm is making its presence felt in this area too.

The company's subsidiary, Qualcomm Atheros, recently announced the introduction of the advanced Wi-Fi standard in a new product ecosystem. The company also announced the release of the industry's first 802.11ac combination chip that enables Wi-Fi, Bluetooth, and FM network connectivity to Qualcomm's Snapdragon line of processors. Time to give Broadcom a run for its money -- the company ruled the market for stand-alone Wi-Fi chips in 2010 with an estimated 28% share, according to Gartner.

A Foolish conclusion
Qualcomm seems to be concentrating hard on improving its ranking as the sixth-largest semiconductor company in the world in terms of revenue, helped by the surge in tablet and smartphone sales. This is one company I'm really feeling good about.

Qualcomm is just one good way to ride the smartphone and tablet wave. But there are more opportunities out there too. I suggest you read a unique free report titled "3 Hidden Winners of the iPhone, iPad, and Android Revolution." With smartphones and tablets selling like crazy, there are lots of companies for you to profit from. Get it while its still there, and don't worry -- it's free.

Add Qualcomm to your Watchlist. It's free!

Keki Fatakia does not hold shares in any of the companies mentioned in this article. The Motley Fool owns shares of Apple and Qualcomm. Motley Fool newsletter services have recommended buying shares of Apple. Motley Fool newsletter services have recommended creating a bull call spread position in Apple. The Motley Fool has a disclosure policy.We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. Try any of our Foolish newsletter services free for 30 days.

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10/27/2016 3:23 PM
QCOM $70.70 Up +2.50 +3.67%
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BRCM.DL $0.00 Down +0.00 +0.00%
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