QCOM disrupting my portfolio

QCOM, hazardous to your portfolio’s health
Why is QCOM such a threat to SWKS and AMBA? I think it is for two reasons: 1) the market thinks it is a threat, and 2) QCOM is a wounded company (IMHO). Revenue from equipment and services is flat compared to 2013. I believe there have been changes on the board of directors. They need new initiatives. But, QCOM earns $8 billion a year in licensing revenue. QCOM has $30 billion in cash. SWKS’ market cap is $12 billion and AMBA’s is $1 billion. QCOM needs to improve performance, either in existing markets or in interesting, new markets and they have cash to burn and the ability to price aggressively.
I know there are all these reasons why customers would not want to change suppliers, and I know “they” say that SWKS has at least 3 to 4 years of cushion until QCOM will have offerings for next generation cellphones. I also would propose that the gushing license revenue has not enabled QCOM to increase revenue in their existing markets. One could question their ability to bring disruptive products to new markets. I also note that the QCOM balance sheet has deteriorated. Cash dropped $1 billion, debt increased from $0.5 billion to $11.8 billion, assets increased only $2 billion and shareholder equity dropped 20%. Still, QCOM is a big, wounded, dangerous competitor.
I think SWKS is better positioned than AMBA regarding the threat from QCOM, and much better positioned to show good results this quarter. AMBA is hobbled by GPRO performance in sports cameras and needs a little time for wearables and drones markets to develop. QCOM has time to compete there. I don’t have the knowledge to evaluate AMBA’s advantage from its decades of leadership in video processing (though I suspect it is considerable).
I have shifted money from AMBA to SWKS recently, just trimmed and added. I still have significant cash. As I posted earlier, I think SKX is safer. BOFI (gasp!) has 24 days average volume stacked up in short sales which is interesting what with earnings due out on (?) 28th. But I think Mr. Market is doubting the power of the central banks and the Chinese government to have the investors’ backs. Worried markets like to find things to worry about, in this case: QCOM. Interesting times.
Just my thoughts on a day after a really bad day.