Qualcomm Inc. (NASDAQ:QCOM) Indicates That Segments Outside Core Mobile Could Drive The Company’s Growth To Match Apple
Qualcomm Inc. (NASDAQ:QCOM) since the beginning of this month has been on the decline, and in the last trading session, its stock lost 1.41% closing the day at $54.03. This is at the back of its executive communication vice president Pete Lancia indicating that the chip maker is considering other segments outside core mobile to take on Apple.
Segments outside core mobile have great potential
In an Interview with IBD Pete gave insight on Qualcomm’s strategic initiatives going forward indicating that they are considering other segments such as IoT, 5G transformation and automotive. The communication voice president stated that although the focus of the company is chip making for mobile other segments contributed to the company’s growth in the last financial year.
Although the company did not give full-year revenue guidance for 2018, it estimated that revenue from segments outside mobile was about $5 billion. Pete said that growth in revenue in segments outside core mobile has grown in the last two years by over 70
The company’s revenue for FY2017 was estimated to be approximately $23 billion of which $5 billion is said to have been from the non-mobile segments. Qualcomm expects to generate more revenue from these segments in 2019.
Which segment could be relevant to Qualcomm?
Pete indicated that although the company is considering expansion to these segments, it has not yet identified which one will bring more growth. The segments the company is thinking about are IoT, automotive as well as 5G.
Although mobile is the largest platform that is driving Qualcomm’s growth, the consumer electronic platform has also shown potential because it is at the core of many aspects today ranging from smart home devices, industrial IoT, and automotive. The dynamic computing segments present a perfect opportunity for the company to leverage its technology and apply connectivity to revolutionize many industries.
According to Pete, the most critical segment they are looking at is Industrial IoT because most things are becoming smart by day. Similarly, 5G could lead the charge because of its capabilities to support many aspects including automotive.