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Qualcomm's market cap pulls even with Intel

updated 03:54 pm EST, Thu November 8, 2012

Mobile processor maker briefly surpasses Intel

Qualcomm, manufacturer of many of the ARM-based chipsets powering some of the most popular mobile gadgets in the world, has pulled about even with processor giant Intel in terms of market cap. Shares of the San Diego-based system-on-a-chip manufacturer have gone as high as $61.99 in trading today, giving the mobile chipmaker a market capitalization of $105.5 billion. As of 3:28 PM EST, Qualcomm shares are up $2.49 on the day for a total market cap of $103.32 billion. Intel's shares, meanwhile, are nearly flat on the day, giving the traditional chip market leader a market cap of $104.16 billion.

Intel remains the world's largest chipmaker, with $54 billion in revenue for 2011, compared to Qualcomm's $19 billion for this past fiscal year. The market valuation, though, is symbolic of a larger trend for Intel, one that may give executives at the company pause.

As The Financial Times points out, Intel hit a peak market capitalization of $502 billion in 2000 at the height of the dotcom bubble. Since then, though, the chipmaker's valuation has plummeted, with share values dropping 14 percent over the past year. Meanwhile, Qualcomm's shares are up 254 percent over the past decade and 8.3 percent for this year.

The two companies' converging market caps are indicative of a shift in the consumer electronics industry. In the world of traditional computing, Intel remains a powerhouse, with its chips powering the four out of five PCs sold to consumers. That market, though, is increasingly showing to be stagnant, with the overall market shrinking as consumers abandon desktops and notebooks for other computing form factors.

Those form factors are largely smartphones and tablets, and Qualcomm dominates the sector. Twenty-four out of 27 smartphones launched by leading operators in Japan featured a Qualcomm chip inside, according to Qualcomm. The low-power ARM designs Qualcomm uses also power tablets, as well as a growing number of ultra-thin notebooks from manufacturers such as Asus and Dell.

The shift away from PCs and toward mobile devices shows no signs of abating. This past quarter saw some 181.1 million smartphone units shipped worldwide, along with 27.8 million tablets, year-over-year increases of 46.4 and 49.5 percent, respectively.

By way of comparison, the PC market shrank 8.6 percent year-over-year last quarter.

Intel executives are cognizant of the trend, and the company has increased its branding efforts in the mobile sector, hoping that the "Intel Inside" sticker that consumers associate with quality in PCs will see the same success when applied to mobile devices. The company has developed a port of Android 4.1 Jelly Bean to run on its low-power Atom chips, and it has partnered with a number of manufacturers to get its own low-power chipsets into more mobile devices.

by MacNN Staff



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