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QUALCOMM, Inc. (QCOM), Apple Inc. (AAPL), And The Intelligent Way To Play Mobile

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The mobile revolution is still going strong, even if smartphones sales are slowing down in developed countries, emerging markets like China, India and Brazil still offer plenty of room for further expansion. If that weren´t enough, tablets are still a high-growth category that will continue creating many opportunities in the middle term.

But the competition among device manufacturers is getting tougher by the day, and companies are seeing their margins squeezed due to lower priced products entering the race. QUALCOMM, Inc. (NASDAQ:QCOM) on the other hand, looks exceptionally well positioned to continue benefiting from the mobile boom for years to come by being a supplier of chips and technologies to the dominant players in the industry.

In the right place

Apple Inc. (NASDAQ:AAPL) is experiencing a clear slowdown in iPhone growth due to a combination of market saturation in the US and growing competition from Samsung and other low cost manufacturers in emerging markets. But that shouldn`t be a reason for concern for QUALCOMM, Inc. (NASDAQ:QCOM) investors: the company supplies both the high-end player with a dominant position in the U.S., which is Apple Inc. (NASDAQ:AAPL), and it also sells to competitors like Samsung and HTC that have been expanding rapidly in emerging markets.

QUALCOMM, Inc. (NASDAQ:QCOM)According to Bloomberg, the new Galaxy S4 model from Samsung will use Qualcomm’s Snapdragon chips in its U.S. version and Samsung´s own Exynos 5 Octa chips in other markets. The Korean manufacturer would prefer to rely entirely on its own technology, but QUALCOMM, Inc. (NASDAQ:QCOM)’s power efficiency and overall quality are not easy to replicate.

When it comes to tablets, the iPad is still performing strongly; Apple Inc. (NASDAQ:AAPL) reported a 65% unit increase for the March quarter versus the same quarter last year, which means growing sales for Qualcomm too. New models from Samsung will likely gain market share in the middle term though, but Qualcomm is well integrated into successful models like the Samsung Galaxy Tab and the Galaxy Note phablets.

One relevant player to watch in the tablet space is Google Inc (NASDAQ:GOOG) as the company´s Nexus 7 models have been widely acclaimed by the critics, and they sell for an aggressively low price starting at $199. Besides, the company is expected to launch the new version of Nexus 7 around July, and this should provide further impulse to the product.

Fortunately for QUALCOMM, Inc. (NASDAQ:QCOM) investors, the new version of the Nexus 7 will be replacing the Tegra 3 chips from NVIDIA Corporation (NASDAQ:NVDA) with Qualcomm´s products. According to Reuters, Qualcomm´s power efficiency has been the driving force behind the change implemented by Google Inc (NASDAQ:GOOG): “In a blow to NVIDIA, Google weighed both U.S. chipmakers’ processors but finally decided on Qualcomm’s for power reasons, one of the sources added.”

NVIDIA Corporation (NASDAQ:NVDA) has always been strong in graphics and gaming, and the company has recently unveiled its Tegra 4 products, which are reportedly quite powerful. NVDIA has been investing heavily to gain ground in mobile over the last years, but QUALCOMM, Inc. (NASDAQ:QCOM) has proven once again that it´s a step ahead of the competition when it comes to the technological quality of its products, at least judging by Google´s decision.

In case you were wondering, Qualcomm is also a supplier to other players like Microsoft Corporation (NASDAQ:MSFT) and Research In Motion Ltd (NASDAQ:BBRY), so if any of these two start gaining – or in BlackBerry´s case regaining – market share in mobile, then QUALCOMM, Inc. (NASDAQ:QCOM) would be well positioned for that scenario too.

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