What Qualcomm actually does

Qualcomm designs the Snapdragon chips inside many Android phones and the modems that connect phones to cellular networks. It also earns licensing fees from phone makers who use its patented wireless technology, and it is expanding into cars, PCs and connected devices.

How the business makes money

It has two main parts: selling chips (QCT) and licensing patents (QTL). Licensing is a very profitable business with high margins, while chips bring most of the sales. It does not manufacture chips itself; others do that.

The dividend story

Qualcomm has paid a quarterly dividend for more than 20 years and raised it each year. The yield is above the tech average. The payout is supported by strong cash flow, but the company depends on the health of the smartphone market.

What to keep an eye on

  • Apple. It is developing its own modems.
  • Smartphone demand. Mature and cyclical.
  • China. Trade tensions and local competition.
  • Licensing disputes. Patent cases can change terms.

Quick take

Qualcomm is a profitable chip designer with a long dividend record, balancing diversification against its dependence on phones.