Track the companies that matter to you. It's FREE! Click one of these fan favorites to get started: Apple; Google; Ford.



Which Company Makes the Most from Smartphone Processors?

There's a handful of competitors vying for the top spot when it comes to smartphone chipmaking, and new data from Strategy Analytics shows Apple (NASDAQ: AAPL  ) made slight gains in smartphone processor revenue share last quarter. 

But while there's lots of fluctuation between the top processor competitors, Qualcomm's  (NASDAQ: QCOM  ) revenue share stays well on top.

When the chips are down
In the second quarter of this year, Apple beat out Intel, Samsung, MediaTek, and Broadcom to take the No. 2 spot in smartphone processor revenue share.

Though Apple doesn't fabricate its own chips, or sell designs to other companies, Strategy Analytics calculated Apple's revenue numbers from market-level average selling prices and unit shipments.

Here's how Apple stacks up against some of the competition:

Data source: Strategy Analytics. 

While Apple's percentage doesn't come close to matching Qualcomm's, it's important for investors to remember two things: First, Qualcomm's core business is in making chips; Apple's is not. Second, Apple has remained a steady competitor over the past year, while Samsung has fallen to the No. 4 spot.

A year ago, Apple had a 16% smartphone processor revenue share, so despite dropping to 15% this year, the company has remained relatively fixed.

Even given Apple's strong position, it's overshadowed by Qualcomm's obvious dominance in the space. Part of the chipmaker's status is attributed to its advancements in LTE, which have outpaced all competitors to date. But it's also the fact that Qualcomm has relationships with many original equipment manufacturers and has design wins in major flagship devices like the HTC One, Samsung Galaxy S4, and Sony Xperia Z. This has helped increase Qualcomm's smartphone revenue share from 43% in 2012 to its current 53%.

MediaTek is attempting to take on Qualcomm's position and recently said it's working on a 64-bit processor and integrated LTE system-on-a-chip technologies. Though Qualcomm's current position is still very strong, increased competition from MediaTek and others will help drive down the cost of LTE devices, and could eventually hurt Qualcomm's dominance.

The one thing for investors to remember is the mobile processor revenue space fluctuates quarter by quarter, and while most of the big players will remain in the top positions, their places may shift. So while Apple has done well against smartphone processor competitors over the past year, the most stable player is Qualcomm. Though MediaTek and others will try to take more processor revenue share from the company, investors should remember that Qualcomm's technology, relationships with OEMs, and its first-mover advantage in LTE will make the company a formidable opponent against anyone attempting to take its No. 1 spot.

All aboard the mobile train
The mobile revolution is still in its infancy, but with so many different companies it can be daunting to know how to profit in the space. Fortunately, The Motley Fool has released a free report on mobile named "The Next Trillion-Dollar Revolution" that tells you how. The report describes why this seismic shift will dwarf any other technology revolution seen before it and also names the company at the forefront of the trend. You can access this report today by clicking here -- it's free.

Read/Post Comments (0) | Recommend This Article (0)

Compare Brokers

Fool Disclosure

Sponsored Links

Leaked: Apple's Next Smart Device
(Warning, it may shock you)
The secret is out... experts are predicting 458 million of these types of devices will be sold per year. 1 hyper-growth company stands to rake in maximum profit - and it's NOT Apple. Show me Apple's new smart gizmo!

DocumentId: 2683428, ~/Articles/ArticleHandler.aspx, 9/26/2016 6:43:44 AM

Report This Comment

Use this area to report a comment that you believe is in violation of the community guidelines. Our team will review the entry and take any appropriate action.

Sending report...

Today's Market

updated 2 days ago Sponsored by:
DOW 18,261.45 -131.01 -0.71%
S&P 500 2,164.69 -12.49 -0.57%
NASD 5,305.75 -33.78 -0.63%

Create My Watchlist

Go to My Watchlist

You don't seem to be following any stocks yet!

Better investing starts with a watchlist. Now you can create a personalized watchlist and get immediate access to the personalized information you need to make successful investing decisions.

Data delayed up to 5 minutes

Related Tickers

9/23/2016 4:00 PM
QCOM $62.75 Down -0.77 -1.21%
Qualcomm CAPS Rating: ****
AAPL $112.71 Down -1.91 -1.67%
Apple CAPS Rating: ****
BRCM.DL $0.00 Down +0.00 +0.00%
Broadcom CAPS Rating: ****
INTC $37.19 Down -0.36 -0.96%
Intel CAPS Rating: ****
SNE $33.60 Down -0.31 -0.91%
Sony CAPS Rating: ***