In a research note published this week, CLSA Asia-Pacific Markets analyst Srini Pajjuri calls attempts by chipmakers to challenge Qualcomm (QCOM)’s dominant position in the baseband radio chips market, a “pipedream”.
According to Pajjuri’s note, rivals like Broadcom Corporation (BRCM), Intel Corp. (INTC), Marvell Technology Group Ltd. (MRVL), Ericsson (ERIC) and Nvidia (NVDA) will fail in their attempts to weaken Qualcomm’s unquestioned baseband technology and market share position. As the top wireless chipmaker, Qualcomm far outpaces its competitors worldwide. In fact, the San Diego, Calif.-based wireless giant is set to extend its lead in baseband share in fiscal 2014 as its competitors continue to lag behind the company.
In his note Pajjuri states that Qualcomm’s only rival as a baseband source supplier will be Taiwan’s MediaTek:[via Barron’s Tiernan Ray] “We believe that the baseband battle is largely over and expect more consolidation in the next 1 – 2 years. Nvidia is already shifting its investments, and we see a strong possibility that Broadcom exits in the next 6 – 9 months. Intel’s new management may have a bit more time, but we do not see enough opportunity to justify its $2bn+ investments. Marvell is least likely to exit in our view, but we expect it to remain a niche player. Overall, we expect the Qualcomm / MediaTek duopoly to get even stronger in the coming years and see positive implications for the overall industry profitability.”
Qualcomm shares closed at $78.01 on Friday.
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