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Qualcomm Incorporated

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2019 Vault Rankings

About Qualcomm Incorporated

QUALCOMM is a leading designer and supplier of computer chips that mobile phone and wireless carriers depend on to get signals straight. The company pioneered the commercialization of the code-division multiple access (CDMA) technology used in digital wireless communications equipment and satellite ground stations mainly in North America. It generates most of its sales through the development and marketing of semiconductor chips such as its Snapdragon line and system software based on CDMA and other technologies. Its biggest customers have been suppliers to mobile phone makers Samsung and Apple.

Operations

The company operates through three reportable segments: QCT, QTL, and QSI.

QCT develops and supplies integrated circuits and system software based on CDMA, OFDMA and other technologies for use in mobile devices, wireless networks, broadband gateway equipment, consumer electronic devices, devices used in IoT and automotive telematics and infotainment systems. The segment accounts for around 60% of revenue.

QTL grants licenses grants licenses to use portions of their intellectual property portfolio, which includes certain patent rights essential to and/or useful in the manufacture and sale of certain wireless products. The segment accounts for 20% of revenue.

QSI reportable segment makes strategic investments.

Geographic Reach

QUALCOMM, based in San Diego, California, gets about half of its revenue from customers based in China (including Hong Kong), while customers based in Ireland, U.S., and South Korea supplies about 10% of revenue, each.

QCT segment's non-United States headquarters is located in Singapore. The segment also operates manufacturing facilities in Germany, China and Singapore, and also sales and administrative offices and research and development centers, primarily in the United States and India.

Sales and Marketing

Revenues from Apple Inc. and its contract manufacturers (Hon Hai Precision Industry Co., Ltd./Foxconn, its affiliates and other suppliers to Apple), Samsung Electronics and combined revenues from GuangDong OPPO Mobile Telecommunications and vivo Communication Technology, and their respective affiliates (including BBK), each comprised 10% or more of consolidated revenues. Revenues from Xiaomi also comprised 10% or more of consolidated revenues.


Financial Performance

QUALCOMM halted a three-year string of falling revenue in 2018 (ended September), and the company recovered from their loss thanks to lower operating cost and expenses.

Sales edged 7% higher to $24.3 billion in 2019 from $22.6 billion in 2018, due to $4.7 billion on their reconciling items, even though with the decrease of QCT and QTL segments fell.

In 2019, the company's net income increased by $9.4 billion resulting to $4.4 billion, compared to net loss of $5.0 billion in fiscal 2018. The recovery was due to the increase on company's revenue and a lesser operating cost and expense.

The company's cash and equivalent balance grew by $62 million maintaining the cash with $11.8 billion in 2019. In 2019, operations generated $7.3 billion while investment activities used $806 million and investing activities used $6.4 billion.

Strategy

Qualcomm engage in strategic acquisitions and other transactions, including joint ventures, and make investments, which they believe are important to the future of the company's business, with the goal of maximizing stockholder value. From time to time, they acquire businesses and other assets, including patents, technology, wireless spectrum and other intangible assets, enter into joint ventures or other strategic transactions and purchase minority equity interests in or make loans to companies, including those that may be private and early-stage. Qualcomm's strategic activities are generally focused on opening or expanding opportunities for their products and technologies and supporting the design and introduction of new products and services (or enhancing existing products or services) for voice and data communications and new industry segments.

From time to time, companies initiate various strategies to attempt to negotiate, renegotiate, reduce and/or eliminate their need to pay royalties to us for the use of their intellectual property.

Mergers and Acquisitions

QUALCOMM acquired Scyfer B.V., a company that developed artificial intelligence technologies, in 2017. Qualcomm added Scyfer’s applications to end-use devices such as smartphones, cars, and robotics to ensure that processing can be done with or without a network

QUALCOMM and TDK formed a joint venture in 2017 to provide chips for mobile devices and internet of things applications. The entity, called RF360 Holdings, combines QUALCOMM’s chip expertise with that of TDK in filters. Application areas are mobile devices, automotive, and drones. The ownership of the joint venture is split 51% by QUALCOMM and 49% by TDK.

Company Background

Professors Irwin Mark Jacobs and Andrew Viterbi founded digital signal processing equipment company Linkabit in 1968. M/A-COM acquired the company in 1980. Led by Jacobs, Viterbi and five other executives left M/A-COM Linkabit in 1985 to start engineer-focused QUALCOMM (for "quality communications") to provide contract R&D services. The company's first home was located above a strip mall pizza parlor in San Diego. CEO Jacobs dreamed of modifying code-division multiple access (CDMA) -- a secure wireless transmission system developed during WWII -- for commercial use.

In 1988 QUALCOMM introduced OmniTRACS, a satellite-based system that tracks the location of long-haul truckers. By 1989, when QUALCOMM unveiled its version of CDMA, the company was working on military contracts worth $15 million.

In 1990 the company interrupted the Cellular Telecommunications Industry Association's (CTIA) plans to adopt a rival technology called time-division multiple access when communications service providers NYNEX (now part of Verizon) and Ameritech (later part of SBC Communications and now part of AT&T) adopted QUALCOMM's maverick technology. QUALCOMM initiated a CDMA public relations blitz and by 1991 Motorola, AT&T, Clarion, and Nokia had signed product development and testing agreements.

The company went public in 1991 and introduced the Eudora e-mail software program (named for "Why I Live at the P.O." author Eudora Welty), which it licensed from the University of Illinois. That year QUALCOMM and Loral Corporation unveiled plans for Globalstar, a satellite telecommunications system similar to the Iridium system. The CTIA adopted CDMA as a North American standard for wireless communications in 1993.

Qualcomm Incorporated

5775 Morehouse Dr
San Diego, CA 92121-1714
Phone: 1 (858) 587-1121

Firm Stats

Employer Type: Publicly Owned
Stock Symbol: QCOM
Stock Exchange: , NASDAQ
President: Cristiano R. Amon
Executive Chairman: Paul E. Jacobs
CEO and Director: Steven M. Mollenkopf
Employees (This Location): 277
Employees (All Locations): 37,000

Major Office Locations

San Diego, CA

Other Locations

Tempe, AZ
Buffalo, CA
Carlsbad, CA
San Diego, CA
San Jose, CA
Santa Clara, CA
Boulder, CO
Orlando, FL
Cumming, GA
Andover, MA
Boxborough, MA
Concord, MA
Rochester Hills, MI
Cary, NC
Clemmons, NC
Raleigh, NC
Bridgewater, NJ
Las Vegas, NV
Austin, TX
Hyderabad, India
New Delhi, India
Brasilia, Brazil
Oakville, Canada
Ciudad De Mexico, Mexico
Taipei City, Taiwan
Cambridge, England