Spreading its wings
From my point of view, Qualcomm seems to be doing something that would go a long way in strengthening business even further by way of diversification. As you might know, Qualcomm already makes chips used in a wide range of Android-based devices. Nokia's
As I mentioned in an earlier article, Qualcomm has a good presence in the market for 4G baseband modems with a 43% market share. The company also plans to make a significant dent in the Wi-Fi chip space with its first-of-its-kind 802.11ac chip that combines the functionality of Bluetooth Wi-Fi and FM radio.
But while Qualcomm might have introduced its S4 processor for Windows tablets, it's definitely not alone in the race.
A few speed bumps
Microsoft is also collaborating with other manufacturers of ARM-based processors, namely, Texas Instruments
Another spanner in the works might be in the form of problems with foundry partner TSMC (Taiwan Semiconductor Manufacturing Co.). The S4 chip in question is based on the 28-nanometer process with which TSMC is reportedly having problems. But these problems aren't restricted to Qualcomm. NVIDIA is also facing problems with TSMC in connection with the production of its Kepler chips.
The Foolish bottom line
Although Qualcomm does face some problems with its manufacturing partner TSMC, the company should see brighter days ahead driven by growing demand for smartphone and tablet devices on the whole. You can take a hint from the company's impressive 123% growth in second-quarter net income. With $15 billion in cash and investments on its balance sheet and just $1.1 billion in debt, I find Qualcomm to be a good bet in the smartphone and tablet space. Click here to add it to your watchlist.
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Keki Fatakia does not hold shares in any of the companies mentioned in this article. The Motley Fool owns shares of Qualcomm, Microsoft, and Apple. Motley Fool newsletter services have recommended buying shares of NVIDIA, Microsoft, and Apple. Motley Fool newsletter services have recommended writing puts on NVIDIA, as well as creating bull call spread positions in Microsoft and Apple. The Motley Fool has a disclosure policy.