According to Qualcomm’s (NASDAQ:QCOM) president of CDMA technologies in Europe, Enrico Salvatori, the company intends to support Nokia’s (NYSE:NOK) smartphones running Microsoft’s (NASDAQ:MSFT) Windows Phone platform in a long-term product roadmap, and not just for a single launch. [1] A few weeks ago, Nokia launched two smartphone devices branded “Lumia” based on Microsoft’s platform and as contenders against smartphones made by Apple (NASDAQ:AAPL) and Google (NASDAQ:GOOG).
We know that Nokia’s first two Windows Phone devices, the Lumia 800 and Lumia 710, will be powered by Qualcomm’s Snapdragon processors. However, a long term product roadmap brings much more optimism. Hence the successful Nokia-Microsoft partnership could easily rub onto Qualcomm. Our $63 price estimate for Qualcomm stock is about 10% above market price.
See our complete analysis for Qualcomm stock here
Positive trends in the making for Qualcomm
Qualcomm already supplies about $14-$15 worth of chipsets for Apple’s newest iPhone, the iPhone 4S (see Qualcomm Gets Big Win Over Infineon with iPhone 4S). Although both Nokia and Apple have lost share in the smartphone operating system market in Q3 2011, Q4 could be well different. [2] In the fourth quarter, Nokia will start selling smartphones based on Microsoft’s platform and Apple has already started selling iPhone 4S in October. These are potential triggers for Nokia and Apple to gain global smartphone market share. This means Qualcomm will be supplying more chipsets to these companies, and hence we expect a share gain for Qualcomm in the chipset market in Q4.
Qualcomm positive on Nokia relationship
The positivity was echoed by Enrico when he said:
The Nokia collaboration is also very much about the Windows Phone ecosystem and, of course, we at Qualcomm, as you know, are supporting on our platform the Windows Phone software and actually at the moment we are the only supplier supporting the i-integrated solution. [1]
Understand How a Company’s Products Impact its Stock Price at Trefis
Notes:- Qualcomm ‘working on Nokia roadmap, not single launch’, Techradar, November 11th, 2011 [↩] [↩]
- Worldwide Smartphone Sales to End Users by Operating System in 3Q11, Gartner, November 15th, 2011 [↩]
