Today was the first day of the Mobile World Congress in Barcelona, Spain, which runs through Wednesday. Yours truly is not in attendance, but some of folks from the Street were there and have filed some dispatches to clients.
Piper Jaffray chip analyst Gus Richard today reflects that Qualcomm’s (QCOM) estimates could go higher based on “robust” smartphone demand. A Q&A at the show with Qualcomm prompts Richard to write that “while we believe QCOM’s 28nm chip has yield issues, we expect them to be sorted out by year end, in time for production ramps.”
Richard writes that “the performance of its latest processor looks impressive and the company indicated a high level of customer interest.”
In addition, he is “seeing a shift to more powerful application processors at Mobile World Congress, benefitting ARM Holdings (ARMH),” which, of course, makes the instruction set architecture and CPU core designs incorporated by Qualcomm and others into their chips for mobile devices.
Nomura Equity Research’s Romit Shah, who rates Qualcomm shares Neutral, writes that the company advantages over other vendors of ARM chips:
We believe Qualcomm has a transistor roadmap advantage over other ARM-based processor suppliers. Qualcomm’s processor will be based on 28nm, versus NVIDIA’s Tegra 3 is on 40nm, and TI just started sampling 28nm OMAP5 […] Qualcomm announced a Pro version of the Snapdragon S4 MSM8960 processor to enable mobile computing devices. The S4 Pro features the Adreno 320 GPU for much better 3D graphics performance. The quad-core MSM8964 will be commercially available before the holidays. We note that MSM8960 is already ahead of many SoCs on CPU performance as indicated by some third-party benchmark results.
Another observation by Shah, after surveying some of the latest kit in Barcelona, is that “The android tablet market is likely dead. Apple has done it again.” Shah did not elaborate.
He thinks most phones shown off there from top tier vendors “lack differentiation.” For example, LG Electronics’s (66570KS) “Optimus 4X” is one such bland phone, in his view, with phones from lesser vendors Huawei (2502CN) and ZTE (0763HK) being just a good, it appears. Samsung Electronics’s (005930KS) “Galaxy SIII” will not arrive on time, he observes.
Shah thinks chip maker Nvidia (NVDA) may have a winner with HTC’s (2498TW) “One X” phone, which comes in a 4.7-inch model and 4.3-inch model, is “really fast,” and has a “better camera experience” than Apple’s (AAPL) iPhone, with the ability to take still images and video at the same time.
This is Nvidia’s first chip win at HTC, which is using Nvidia’s quad-core “Tegra 3” application processor. The One X comes out in April.
Nvidia shares today closed down 32 cents, or 2%, at $15.47. Qualcomm shares closed down 13 cents at $63.31.
Meantime, RBC Capital’s Mike Abramsky writes that Research in Motion (RIMM) had a “subdued presence” at the show, which is about what investors expected, he writes. “RIM may be holding back announcements until its analyst day in May and closer to availability of BlackBerry 10 devices in 2H/CY12,” writes Abramsky. He maintains a Sector Perform rating on RIM shares.
RIM stock closed down 30 cents, or 2%, at $14.42 today.
Nokia: Small Steps to Turnaround at MWC, Says Wells, February 27th, 2012; Intel: Raymond James Likes Mobile Chip Direction, February 27th, 2012; NOK: Rightsizing Networks Unit; No Microsoft Deal Planned, February 27th, 2012; Cisco: ISI Discusses ‘Key Architectures’ at Mobile World Congress, February 27th, 2012;