Samsung to Hang Up on Qualcomm?

Bloomberg: Samsung to drop Qualcomm chips from its smartphones.
4:07 | 01/21/15

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Transcript for Samsung to Hang Up on Qualcomm?
I'm Michelle Franzen in new York at the financials are closing in on our last hour on Wall Street for this Wednesday January 21. This story stock Qualcomm them naysayers of mobile devices sliding lower today why. Samsung the world's largest Smartphone maker. They said to be no longer interested in using Qualcomm snapdragon chips in its phones this according to Bloomberg instead Samsung is. Going with the ship of its own design and here to explain what is going on with Qualcomm I'm joined by Ben Rubin of CNET hi Ben. I area good Qualcomm stock nearing 52 week lows today and how bad would it be. To afford to lose Samsung. It would probably be devastating Samsung is one of Qualcomm its biggest customers. Samsung is also a biggest Smartphone maker in the world Salo on top of the lost business that Qualcomm would have it would also be a huge reputation head. To Qualcomm to lose such a significant. Company. As Samsung. All right let's talk a little bit about what's wrong when pot comes late it's snapdragon chip. So it's not entirely clear to me. That there is anything wrong with all comes news snapdragon a ten ship. It's not that it's not like Qualcomm has been sending out press releases or talking to a lot of folks about some of the potential issues that it's been happening with its brand new high and eat ten ship. By there has been a lot of conversation. A lot of rumors lot of speculation that. The chip has been overheating and so does this is apparently. What's caused the problems. With Samsung and why they'd may have decided to go in another direction. I don't Samsung of course makes other consumer electronic devices could it's. Own chips though one day power all of the company's devices and what do we know about what they're trying to do to move to use its own ship its Smartphone. So. Samsung develops its own chips called X and hosts its one of the few vertically integrated companies out there at that. Develops. Actual electronic devices like Smartphones TV's other stuff like that and also has chips and foundries so. It's one of the few companies where they think they do have a problem with Qualcomm chips they could just moved to their own stopped their darn a lot of companies out there that could do that. That being said Qualcomm is very much ahead of the game and very very dominant in mobile devices and it's specially in Smartphones. An LTE technology so. It's not like Samsung could all of a sudden wake up one day and start powering all of its devices and dot Smartphones and tablets with out Qualcomm. In many ways it really doesn't Qualcomm. To continue moving forward. So why has the company's stock and sort of sliding this past year and what will it take for Qualcomm to turn this doll around. Big impetus actually. Four Qualcomm being quite a laggard this year it's down about 5%. Over the past year compared to the S&P 500 which is up about 10%. Is actually China. Hadn't entirely. Monopoly regulators in China have been looking into call comes. Business for more than a year now and that has been oh really negative impact on Qualcomm stock. So. This this talk about Sam's Sidon comes at pretty unfortunate time for Qualcomm because. It's stock has already been suffering. Because of what's been going on in China and that's been a really big overhang on the stock. For the past years I'll. All right summed in the keep a watch. On Ben Rubin from CNET thanks for joining us. Thanks. Even watching stories stuck stay with abcnews.com. For your latest headlines I'm Michelle Franzen in New York.

This transcript has been automatically generated and may not be 100% accurate.

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