## **Pros:** ✅ **Royalty Revenue:** Qualcomm's extensive patent portfolio in wireless technology secures a lucrative stream of royalty revenue from most 4G and 5G phones sold. ✅ **Chip Leadership:** As a leader in wireless chips, Qualcomm boasts significant market share in 5G chipsets, backed by strong relationships with top smartphone manufacturers. ✅ **Diversification:** The company's expansion into automotive and IoT sectors opens new revenue channels, reducing its dependency on the smartphone market. ✅ **Strong Diversification Success:** Automotive revenue grew 59-61% YoY across FY2025 quarters; IoT segment (including Meta Ray-Ban smart glasses and Quest headsets) showing robust growth. CEO highlighted on-device AI strategy positioning Qualcomm well for DeepSeek R1 and similar efficient AI models that run locally versus cloud. ✅ **PC Chips Growth Opportunity:** As Windows ecosystem becomes more open to non-traditional CPUs, Qualcomm is well-positioned to grab share in the PC market. ✅ **Valuation:** The company appears to be relatively less heavily valued than some of its peers in the chips sector, with strong margins and solid sales. Debt is under control and being reduced. ## **Cons:** ❌ **Market Share Loss:** In its chip business. major clients like Samsung threats developing mobile processors in-house, as Apple already did. ❌ **Losing Apple Modem Business:** Company confirmed it expects to lose Apple as modem customer in coming years as Apple develops in-house modems, representing significant long-term revenue risk despite current strong diversification efforts. ❌ **Regulations:** Qualcomm's licensing business has faced global regulatory scrutiny (US,Taiwan, China, EU, South Korea), which could impact its royalty-based revenue model. ❌ **Diversification Challenges:** Moving beyond smartphones to automotive and IoT is highly competitive with others established competitors, as many companies aim for a slice of these growing markets. ❌ **Supply Chain Risks:** Qualcomm depends on Asian foundries for chip production, exposing it to geopolitical tensions or supply issues that could raise costs or delay deliveries.