Chipmaker Qualcomm (QCOM)
Hot on the heels of Qualcomm's strong fourth-quarter results, analysts are confident of the company's prospects. With telecom firms and handset makers pushing towards high-speed 4G LTE networks, Qualcomm's chip technology is perfectly positioned, analysts say.
Goldman Sachs analyst Simona Jankowski, for example, expects Qualcomm to reiterate its expectations for double-digit top and bottom-line growth during its analyst event. Key catalysts, she explained in a recent note, include the shift from 2G to 3G and 4G networks, as well as the growing proliferation of smartphones.
"We expect the upbeat tone from the company's recent earnings call to continue," she said.
Speaking during the company's recent fourth-quarter earnings call, Qualcomm CEO Paul Jacobs cited "continued deployment of advanced network technologies" as one of the company's key growth drivers.
Specifically, the CEO pointed to data from the Global Mobile Suppliers Association (GSA) highlighting the expansion of next-generation networks. According to the GSA, he said, there are now 152 HSPA+ and 35 LTE commercial networks throughout the globe.
Within its processor family, Qualcomm supports both LTE and HSPA+, which delivers 4G speeds over mobile broadband. The firm, however, has also been winning plaudits for its 4G baseband chipset, which converts radio signals into sound and data for mobile devices.
"You can have a single chip which supports multi-mode, therefore a 3G chip that also supports GSM and the progression to 4G/LTE," Vijay Rakesh, an analyst at Sterne Agee, said in an interview. "It will also support the local China standard, which is TD-SCDMA."
In particular, Rakesh sees Qualcomm's new 28-nanometer Krait technology as a major growth driver.
"The 28-nanometer chips offer 3G-4G-GSM on one piece of silicon and can offer a more cost-effective solution for handset OEMs looking to produce phones for multiple protocols and geographies," he said.
Specifically, according to Rakesh, Krait will help Qualcomm open up a "virtually untapped" market for the firm in China.
"We expect Qualcomm to emphasize its significant competitive advantage in its move to 28-nanometer," added Goldman's Jankowski. "As well as its support of all air interface standards (including all LTE frequency bands) and the highest level of integration (app processor, graphics, baseband, connectivity management) on its 28 nanometer portfolio in 2012."
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