QUALCOMM, Inc. (QCOM) is seeing opportunities in the smartphone space as it collects royalties on all 3G and 4G smartphones, based on application service providers that are still a positive trend in the segment, says Ian Ing, Vice President and Senior Analyst at Lazard Capital Markets.
“[QUALCOMM sells] both chipsets as well as collect royalties on all 3G, 4G smartphones that are being sold. I think the opportunity is still being underestimated. The royalties they collect are based on device ASPs for these handsets, and I think there is still a lot of support for very high device ASPs in these flagship smartphones,” Ing said.
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New features are still being added onto smartphones, and next year Ing expects to see wireless charges for content adding dollars on the ASP side, setting up QCOM to benefit as it collects its royalties from device ASPs.
“This year we’re looking at things like mobile payments, including fingerprint-sensing hardware; we’re looking at HD Wi-Fi, a new generation of Wi-Fi being added. Next year, I think there is going to be wireless charging on these phones that adds about $2, $3 of content, adding closer to $5-plus on the ASP side. So, I think there are a lot of positive trends on the device ASPs with these smartphones, which QUALCOMM collects a percentage of royalty on, so I think that’s a nice positive trend,” Ing said.
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