Hell has frozen over. Qualcomm, a company that designs chips and modems for smartphones and tablets, is now worth more than Intel, a company that not only designs their own chips, but also makes them in some of the world’s most advanced fabrication plants. What kind of numbers are we talking about here? Qualcomm’s market cap, which is defined as the number of shares multiplied by the share price, is roughly $105 billion. Meanwhile, Intel is hovering around $100 billion.
How exactly did this happen? There are several things to consider here, the most obvious being that we hit “peak PC” shipments back in 2010. By that we mean sales of personal computers are never going to be as big as they used to be. Sales of smartphones have also surpassed sales of personal computers as recently as Q4 2011. In a nutshell, Intel is making products for a shrinking market, whereas Qualcomm is targeting an industry that’s still experiencing phenomenal growth.
But why Qualcomm and not someone else like Texas Instruments or NVIDIA? For that answer we have to go back to 2008. Back then, making a phone was a pain in the ass. You had to buy a processor from one company, a baseband (cellular radio) from another, a WiFi/Blutooth/GPS combination chip from yet another player, then spend months on making sure all those pieces worked together. Qualcomm blew that process out of the water with Snapdragon. They were the first to offer handset makers a complete package, which not only reduced time to market, but let handset makers focus on the things that contribute to their bottom line: sales and distribution.
Ironically, TSMC, the company that produces the chips Qualcomm designs, is worth “only” $84 billion, so that should tell what the market values. It’s not the physical factories so much as the brain power and insight to create hardware platforms that manufacturers demand.
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Waiting for i7 in a smartphone (though pretty impossible but still) :D
You say that now, but just give it a few years.
Yea I ment that it’s impossible now but when the first good phone with good dual or quad core intel comes, I’ll be first to buy it :)
The RAZR i. Sure, it’s single core, but it has HyperThreading, so Android sees it as a dual core processor.
This shows clearly Apple is a piece of shit…
Everyone knew that already :D
Which one is bigger. Goolgle or Qualcomm? That’s show you that software rulez. It’s time to put in the time and let my creativity shines.