Qualcomm is the developer of a type of mobile phone communication technology called Code Division Multiple Access (CDMA). About 44% of mobile phones in the world use CDMA, up from 22% in 2005.
Qualcomm makes money from mobile phone makers that use its CDMA technology. Mobile phone makers like Nokia and Motorola pay Qualcomm a royalty rate of about 4% of the selling price of each mobile phone sold with Qualcomm’s CDMA technology. This royalty rate has declined from over 4.7% in 2005 and we forecast that it will be 3.3% by the end of the Trefis forecast period. We estimate that mobile phone royalties constitutes about 33% of Qualcomm’s stock price.
Within Qualcomm’s content on our platform, you can see how the CDMA Mobile Phones Royalty Rate impacts Qualcomm’s stock price. The Trefis estimate for Qualcomm’s stock is $45.52 compared to a market price of $46.21 as of the close on Friday.
