If Qualcomm Can't Revolutionize Car Tech, Nobody Can
"If Qualcomm can't do it, nobody can do it," Rob Enderle, principal analyst at Enderle Group, told Benzinga. "They're pretty much a pure-play networking company -- as close as we get in this market in terms of networking technology. And they're the most powerful."
Enderle noted that QUALCOMM has been pushing LTE Direct (the company's device to device technology) for a while. He said it should be able to handle the bandwidth and the requirements for cars talking to each other.
"They kind of know best how this should work given [the] current technology," said Enderle. "They've got the inside track to getting it to work. Working against them is the fact that the auto companies tend to be very proprietary. Working for them is the fact that car companies recognize that they don't have a clue when it comes to this stuff.
"They need a ton of help, so they're working with Qualcomm, NVIDIA [and] Intel. [Automakers] are actively looking for help from the technology segment."
More Than A Chip
Global Equities Research analyst Trip Chowdhry thinks that if QUALCOMM is going to deliver on its promise, the company must "go beyond [its] comfort zone."
"I believe it should be a complete solution," Chowdhry told Benzinga. "The world is going in that direction. If you think about, why is the cloud getting so popular? Because they can't own the complexity themselves.
"If you can bring the hardware [and] software into a solution that somebody can just take and put… into the cars, it will be a phenomenal success."
Chowdhry said if QUALCOMM is only planning to provide a chip or two, "It is not something investors should get excited about."
"If it is a complete solution and automakers can take it and in less than five minutes get the product into the car and it works, it will be phenomenal," he added. "Today, the time to gratification has shrunk. Today something is cool, the next few days it could be obsolete. The only way you can avoid obsolescence is to give solutions."
Disclosure: At the time of this writing, Louis Bedigian had no position in the equities mentioned in this report.
Latest Ratings for QCOM
|Oct 2016||RBC Capital||Maintains||Sector Perform|
|Sep 2016||Argus Research||Maintains||Buy|
© 2016 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.