Wireless chip giant Qualcomm Inc. (QCOM 1.41%) is the world's most successful vendor of mobile applications processors and arguably the most innovative when it comes to wireless technology and standards.

While there's a lot to admire about Qualcomm, there's no denying that the stock has been painful to hold in recent years. As chip stocks seemingly soar to new heights each week, Qualcomm's shares are well below their 2014 peak of around $82 per share.

Two Qualcomm chips.

Image source: Qualcomm.

In this column, I'd like to go over two big mistakes that Qualcomm has made to erode shareholder value.

1. Wasting money on the PC market

Qualcomm has been quite vocal about its efforts to try to sell its Arm-based processors into Windows-based personal computers. While the company has made quite a lot of noise about the battery-life advantages its processors offer relative to competing processors (though that battery life comes at the expense of performance), the reality is that Qualcomm is going up against a giant in this market: Intel (INTC 0.64%).

Intel has a much broader portfolio of products for the PC market, so while Qualcomm can potentially go after a few computer designs here and there, Intel can -- and does -- supply chips into all different kinds of computers, from thin-and-light notebooks to ultra-high-performance desktops, and everything in between.

Additionally, most Windows software needs to be emulated on Qualcomm chips, while it runs natively on Intel chips. Emulation leads to significant performance degradation at best, and at worst it doesn't work. This further compounds the performance deficit of Qualcomm-based computers relative to Intel-based ones. 

And, finally, Qualcomm has to compete with Intel's huge marketing budget and brand recognition in the personal computer market.

In effect, Qualcomm is throwing a lot of money at this market, where the odds of its success are poor, the barrier to entry is high, and the potential reward isn't that compelling (since Qualcomm's products target only a small sliver of the overall PC market).

2. Telling Broadcom to buzz off

Fellow chip giant Broadcom (AVGO 0.61%) offered to buy Qualcomm for $82 per share in a transaction that would have been made up of $60 per share in cash and $22 per share in stock.

The offer was a good one, offering Qualcomm stockholders a nice boost from where the stock traded before rumors of the offer hit the market, as well as allowing the company to exit its life as an independent entity with a bang.

Instead of seriously considering this offer, Qualcomm kicked and screamed, and when Broadcom initiated a proxy fight -- a fight that looked pretty grim for Qualcomm as investors seemed to vote overwhelmingly for Broadcom's proposed set of directors -- Qualcomm was bailed out by the current administration, which blocked the deal, citing national security concerns.

Instead of taking the $82 per share and maximizing value for its stockholders, Qualcomm now remains independent, and the shares trade at around $55. Ironically, recently ousted Qualcomm chairman Paul Jacobs reportedly tried to rally support to take Qualcomm private at roughly the price that Broadcom was willing to pay -- an action that appears to have cost him his seat on Qualcomm's board of directors.