Brean Downgrades Qualcomm Amid Competitive Threats, Concerning Environment

The main reasons for Brean's downgrade were competitive price headwinds, lower applications service providers for smartphones, "longer factor change cadences at Apple" and "ongoing challenges to its licensing business," said Burton. The analyst, however, noted Qualcomm has room for increasing gross margins by strategic cost cutting methods.

Related Link: Qualcomm Reveals Connected Car Reference Platform

Reliance On Apple

Like microchip companies and other smartphone suppliers, apple's business performance plays a large part in the performance in Qualcomm. "If Apple Inc. AAPL's aspirational device is not holding up the high end of pricing, the entire market tends to suffer" said Burton.

"Having said that [...] we currently see a case of possible unfavorable pricing, whereby we see all the the strength in the handset market coming from two places: (1) lower-priced handsets in China, and (2) from the Apple 6SE phone," stated the analyst.

At time of writing, Qualcomm traded at $54.40, down 0.98 percent.