Qualcomm $QCOM, NXP, Apple $AAPL, Trump & China: The Path Forward

$QCOM shares UP 5.2% since end of October 2017 (dividend 4.25%), in spite of the Broadcom bust by Trump

It's been a turbulent environment for Qualcomm (NASDAQ: QCOM) (domain: Qualcomm.com) and its shareholders, on various fronts:

• Trump issues order blocking Broadcom takeover of Qualcomm, citing national security | TheVerge.com Mar 12, 2018

• China Pushes Qualcomm to Protect Local Companies in NXP Deal | Bloomberg.com Mar 20, 2018.
• China Started the Trade War, Not Trump | WSJ.com Mar 23, 2018: "If there’s a trade war between the U.S. and China, don’t blame Donald Trump: China started it long before he became president. Even free traders and internationalists agree China’s predatory trade practices ...."  
• Qualcomm: A Fearful Aftermath | SeekingAlpha.com Mar. 19, 2018: "Looking across all three major issues for Qualcomm going forward, namely the NXP acquisition, 5G launch, and the legal dispute with Apple, there are substantial concerns and uncertainties hanging over each ... a majority of Qualcomm's institutional holders are frustrated with the level of earnings and share price performance achieved by the current board over the past four years" (links and emphasis added).
• On top of everything else, Qualcomm's former chairman, Paul Jacobs, wants to take Qualcomm private.
• On Friday, Qualcomm shareholders re-elected the board of directors with only "tepid support"--Reuters.com March 23, 2018.
• Qualcomm CFO George Davis told shareholders at the Friday meeting that Qualcomm's offshore cash was needed in connection with the $44-billion acquisition of chip maker NXP Semiconductors NV NASDAQ: NXPI, (pending clearance from Chinese regulator MOFCOM), and therefore could not be distributed to shareholders via dividend.

And finally, in spite of Trump's national security concerns, it is clear Qualcomm has deep relationships with the government of China and Chinese companies such as Huawei, which Broadcom pointed out in the following infographic (pdf) filed with the Securities and Exchange Commission in Washington, DC:

Opinion and Analysis: what's the best path forward?

Apple (NASDAQ: AAPL), which has the cash, buys Qualcomm. No major Silicon Valley company has more credibility than Apple, with either the Trump administration or China, as US Treasury Secretary Steven Mnuchin will attest:

Glad to visit @Apple HQ with @tim_cook. Thank you for your commitment to invest 350B in USA! #TaxCutsJobsAct pic.twitter.com/TasRA55smG

— Steven Mnuchin (@stevenmnuchin1) March 16, 2018

Yes, it would be a big step in vertical integration which Apple's major global competitors, including Samsung and Huawei, have been pursuing for some time. It would also provide a future profitable growth trajectory for Apple and its shareholders. Apple CEO Tim Cook, a global logistics and supply chain expert, could pull it off:

Apple's Tim Cook calls for calm on China, US trade: China Development Forum | cnbc.com Mar 24, 2018: "Apple CEO Tim Cook called for "calm heads" and more open trade amid rising fears of a trade war between the United States and China. "I'm cognizant that in both the U.S. and China, there have been cases where everyone hasn't benefited, where the benefit hasn't been balanced," Cook said. Cook was speaking at the annual China Development Forum in Beijing."

-- John Poole, editor, DomainMondo.com (Disclosure: I own no shares in any of the companies mentioned in this post and no plans to initiate any positions within the next 72 hours.)

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