Qualcomm has been on a buying spree recently. Last week the carrier bought mobile software firm Elata for $57 million, and just a few days before the company acquired Flash-OFDM wireless network company Flarion Technologies for $600 million. Many insiders and analysts expect Qualcomm to make at least one or two more big acquisitions in the next few months.
Why is Qualcomm buying companies? It racked up $6 billion in sales last fiscal year with 42 percent operating margins and royalties from its intellectual property that few other companies can match. While Qualcomm is in good position now, the company needs proprietary technology to survive -- licensing revenues account for 34 percent of Qualcomm's sales. Simply put, that means Qualcomm has to buy lots of compelling new technology or face elimination once its CDMA technology is leapfrogged by more advanced systems.
For more on Qualcomm's recent spending spree:
- read this article from BusinessWeek