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FBR Deep Dives Into Global Handset Content Trends, Highlights Six Key Takeaways

FBR Deep Dives Into Global Handset Content Trends, Highlights Six Key Takeaways
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In a new report, FBR analyst Christopher Rolland takes a deep dive into global handset content trends. FBR has identified six key elements to watch heading into 2016.

6 Takeaways

Though the firm remains bullish overall for many of the semiconductor names under its coverage, FBR believes that handset content trends are a critical part of identifying future outperformance in the space. Here are the six takeaways from Q4 that FBR is watching:

  • 1. Qualcomm, Inc. (NASDAQ: QCOM) gained modest market share in Q4, particularly in the high-end processors space.
  • 2. Arm Holdings plc (ADR) (NASDAQ: ARMH)'s momentum continues to be weighed down by slowing 64-bit and eight-core attach rates.
  • 3. NFC attach rates were solid in Q4 but remain weak.
  • 4. Intel Corporation (NASDAQ: INTC) showed modest improvements with Cherry Trail and SoFIA in Q4, although the majority of the growth is in tablets rather than mobile.
  • 5. There has been a slight slowdown in the second derivative for LTE band growth, which could be a potential negative for the RF business.
  • 6. Despite fears over the Chinese economy, handset sell-through remains "just fine."

Qualcomm A Q4 Winner

According to Rolland, Qualcomm’s share gains make it a big winner in Q4.

"While we still fear that companies such as Samsung and Huawei are utilizing their own proprietary processors in their new designs, Qualcomm won designs in ~30% of Samsung and ~60% Huawei mobile devices that came to market in 4Q15, an improvement sequentially at both OEMs," he explained.

Related Link: This Hedge Fund Manager's Worst Ideas For 2016 May Surprise You

Stock Picks

Despite the strong Q4 performance, FBR maintains a Market Perform rating on Qualcomm.

The firm’s Outperform-rated semiconductor devices stocks with the most upside to their target prices are ON Semiconductor Corp (NASDAQ: ON), ARM Holdings and Avago Technologies Ltd (NASDAQ: AVGO).

Disclosure: the author holds no position in the stocks mentioned.

Latest Ratings for ARMH

Jul 2016BerenbergDowngradesBuyHold
Jul 2016BernsteinUpgradesUnderperformMarket Perform
Jul 2016Raymond JamesDowngradesOutperformMarket Perform

View More Analyst Ratings for ARMH
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Posted-In: Christopher Rolland FBRAnalyst Color Analyst Ratings Tech Best of Benzinga


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