It's good to be the king, and Qualcomm (NASDAQ:QCOM) has certainly cemented its dominance as the smartphone chip vendor of choice. Just about every Android handset is powered by Qualcomm's silicon -- yes, Samsung included -- and even Apple's venerable iPhone sports a Qualcomm baseband and RF.
If one had to declare the biggest "winner" from the mobile revolution, it could be argued that Qualcomm deserves the prize. With each cellular device sold, Qualcomm collects a 3-5% royalty on the sale price of said device, and the odds are good that those devices also have Qualcomm silicon.
Qualcomm wins again
When it comes to Microsoft's (NASDAQ:MSFT) Windows Phone, there is only one silicon provider that matters -- Qualcomm. Windows Phone hasn't exactly lived up to the market-share numbers that Microsoft had hoped. Grabbing a bigger share of the market is why it acquired the only Windows Phone player that mattered and is going at it solo. But it's still likely that Microsoft will eventually get this one right.
While Qualcomm seems set to face stiff competition in Android handsets over the next year with entries from Intel (NASDAQ:INTC), it seems curious that no other silicon vendor is talking up Windows Phone support.
Indeed, the recently leaked specifications of Nokia's (NYSE:NOK) upcoming 5-inch Lumia 929 phone indicate that it would come with Qualcomm's finest and most expensive processor, the Snapdragon 800. While it's no surprise that a Nokia phone would come with a Qualcomm processor -- anything even remotely high-end comes with Qualcomm -- what is surprising is how little the other silicon vendors are even talking about Windows Phone. Do they intend to leave it all to Qualcomm?
Intel, are you there?
Intel is already locked out of Apple's iOS by virtue of the fact that Apple designs its own chips and is married to the ARM instruction set architecture. But it seems pretty clear that supporting Windows Phone, from a long-term perspective, seems to be something that's on the agenda.
Indeed, once Intel has competitive phone silicon, it shouldn't stop at trying to fight in the Android market, which is increasingly dominated by lower-end devices. It needs to pursue Windows Phone. Why?
Think about it this way: Windows Phone continues to gain market segment share, particularly due to the Nokia push. With Microsoft's massive marketing push, its expanding store presence, and the continual improvements it's making on its Windows Phone platform, it will likely continue to gain market share. Whether it's material or not in the long run does not matter; Intel can't afford to be "locked out" of any more smartphone ecosystems when/if said ecosystems ever get popular.
NVIDIA, how about you?
Interestingly enough, while the "Wintel" partnership is well-known, NVIDIA (NASDAQ:NVDA) has plenty of experience working closely with Microsoft, both on Windows RT and on graphics drivers for its GeForce/Quadro line of GPUs. Why, then, has NVIDIA not shown any particular interest in working on Windows Phone?
While it's understandable that Intel is MIA since it still doesn't have competitive smartphone silicon available, the Tegra 4 successfully found a home in some version of the Xiaomi Mi3. While the Tegra 4 would unlikely be able to win any Windows Phone designs due to the fact that Qualcomm can offer a more complete package -- with apps processor, modem, connectivity, etc. -- it's still peculiar that no announcements with respect to Windows Phone enablement for Tegra have been made. Perhaps in due time, though?
Foolish bottom line
When it comes to phone silicon, Qualcomm is still far and away No. 1. While it's great that its top-end silicon is finding a home in Nokia's latest Windows Phone handsets, the bigger takeaway is that this is a platform on which Qualcomm is unlikely to face much competition for quite some time. And that, for Qualcomm investors, is a good thing.