Google Inc (GOOG), QUALCOMM, Inc. (QCOM) – The Moto X: Not Good Enough

Motorola is a financial and balance sheet liability, but thankfully owning Google Inc (NASDAQ:GOOG) was never about hardware. It was always about advertising revenue.

Qualcomm’s mid-level still has strength

What’s interesting is that there’s ongoing demand for QUALCOMM, Inc. (NASDAQ:QCOM)’s mid-level systems on a chip. Qualcomm reported that it shipped 246 million chips in the first quarter of 2013.

I don’t have the exact pricing of a Snapdragon processor, but according to QUALCOMM, Inc. (NASDAQ:QCOM)’s earnings transcripts the average selling price for the chips was around $13. The price point is so ridiculously low that Intel and every other mobile semiconductor cannot compete with Qualcomm.

Intel isn’t expected to generate much growth from mobile as it would have to be competitive on both price and product. Currently, Intel doesn’t have as fast of a release cycle for mobile chips as QUALCOMM, Inc. (NASDAQ:QCOM) does nor does it offer as extensive of a product line. The low gross margins would only hurt Intel, not help it.

Conclusion

What’s interesting is that I don’t see a single Intel chip going into the Motorola. For now, QUALCOMM, Inc. (NASDAQ:QCOM) is the reigning king of mobile CPUs and CDMA/GSM technologies.

The Moto X fell below expectations. There was nothing significantly unique about it that would make someone want to buy it. The Texas facility will become empty unless if the company releases a more compelling product. For now, I’m going to let the buck stop here in Texas, and bank on the Apple team from Cupertino, California.

The article The Moto X: Not Good Enough originally appeared on Fool.com and is written by Alexander Cho.

Alexander Cho has no position in any stocks mentioned. The Motley Fool recommends Apple and Google. The Motley Fool owns shares of Apple, Google, and Qualcomm. Alexander is a member of The Motley Fool Blog Network — entries represent the personal opinion of the blogger and are not formally edited.

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