For years, Qualcomm was like an ATM machine. Soaring revenues and earnings fed cash into the machine, to be dispensed to company shareholders, managers, and employees.
That’s what made Qualcomm a case study in business schools around the globe, and a stellar performer on Wall Street.
Qualcomm was in the right business at the right time—wireless technologies–riding one mobile communications trend after another. And its products became the industry standard.
Simply put, Qualcomm had turned into a sole toll collector for almost every smartphone made around the world, especially in Korea and China where smartphones are manufactured.
And as a sole collector it set the price of the tolls.
That could explain the company’ high operating margins over the last two decades, and the stash of piles of cash, which kept feeding its ATM machine.
But recently, the ATM machine seems to be running out of cash. This is evidenced by a string of quarterly financial reports, which indicate a sharp decline in the company’s revenue growth, from 30% three years ago to -14.30% lately.
Qualcomm’ Financials as of 11/4/2015

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