New | Qualcomm chief pushes back on break-up proposed by Janus

Qualcomm Inc's President Derek Aberle, under pressure from activist hedge fund Jana Partners to improve the licensing and chip design firm's stock performance, on Thursday sounded a cautionary note about a potential breakup of the company.

Stressing that the board and management do not expect to complete a review of a possible split until the end of the year, Aberle said Qualcomm agrees with Jana that its stock is undervalued. Shares have fallen 25 per cent over the past 12 months, whereas the S&P 500 is down 2.25 per cent.

Aberle said that investors calling for a split are taking a "sum of the parts" analysis and believe that Qualcomm's two divisions - its highly profitable licensing arm and its chips unit - would be valued more highly as independent companies.

"You have to step back and say why is that and would a separation actually solve whatever the underlying issues are that are creating the current valuation?," he said. "You have to be careful that it's not too simplistic."

The company's current structure, Aberle said, also allows Qualcomm to leverage relationships with Chinese customers, since the chipmaker is well-positioned to help them expand to other countries.

At the same time, Aberle acknowledged that having both a chips and licensing division has at times created conflicts with customers, "but we manage it pretty well".