Will Smarter Wi-Fi Boost Qualcomm Inc. Stock?

Qualcomm  (NASDAQ: QCOM  ) is working on technology that promises to triple Wi-Fi speeds, but it could be years before everyday networks see the benefit. Fool contributor Tim Beyers explains the implications for Qualcomm investors in the following video.

Interestingly, Qualcomm isn't pitching speed so much as efficiency. The technology, called MU-MIMO for "multi-user, multi-input, multi-output," allows multiple groups to gain access to wireless signal at the same time at speeds consistent with their usage. The theory? Smarter delivery should lead to higher overall speeds, especially since current Wi-Fi technology tends to serve a single group or user at a time.

Can the plan work? Tim says a lot depends on how quickly Qualcomm brings MU-MIMO to market since the technology requires both broadcasters (e.g., routers) and recipients (e.g., computers, smartphones) to have compatible radios. Convincing manufacturers of desktops, laptops, tablets, and smartphones to adopt the technology may not be easy.

Or maybe the timing is exactly right. Research firm IHS says we should expect another 6 billion-plus devices to seek connections to the Internet this year. A plurality will log in wirelessly, creating a need for the sort of bandwidth management MU-MIMO provides.

Either way, history says manufacturers tend to take their time changing internal tech specs. Investors shouldn't be surprised if Qualcomm's estimate that it will begin shipping MU-MIMO chipsets to customers early next year proves too optimistic, Tim says.

Now it's your turn to weigh in. Do you expect the industry to adopt MU-MIMO soon?  Why or why not? Please watch the video to get the full story and then leave a comment to let us know your take, including whether you would buy, sell, or short Qualcomm stock at current prices.

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  • Report this Comment On April 17, 2014, at 3:11 PM, willy325 wrote:

    I am just not knowledgeable enough to predict the future for this but it looks good. I am a long term stockholder in QCOM and reinvest my dividends. I think my original cost was just over six bucks so I am happy.

    I totally believe in management and their capabilities and expect to remain a stockholder forever or until the story changes.

    Revolutionary changes can make a lot of money but evolutionary changes can as well and they are the slow and steady ones that do better in the long haul.

    Thanks for the article…and I would not hesitate to buy this stock at all but, thankfully, I have enough and I expect it to overtake many of my more traditional holdings in value and in dividends within the next six years.

  • Report this Comment On April 17, 2014, at 9:55 PM, NozRydr wrote:

    article overlooks the fact that QCOM is on both sides of the Wifi hardware solution and in a position to facilitate the rapid adoption and availability of hardware.

    On the router side, the acquisition of Atheros acquisition instantly made Q a major WiFi router chip supplier.

    The subscriber side of WiFi is more obviously traditional QCOM chip market. That's not just smart phones either. The Gobi universal modem has been a huge hit for laptop OEMs (sold by the millions). I'd expect to see QCOM making this new WiFi technology a standard part of their subscriber chipsets.

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