Qualcomm’s third quarter revenue increased by 22% to $11.39 Billion. However, the company’s forecast for the smartphone market was not very optimistic. The share price fell by 7.56% at the close of trading. According to this supplier, the smartphone market is expected to shrink by 10-12%, not 5-6% according to current calendar year results. The company will also cease hiring new staff starting in the next quarter.
According to Qualcomm representatives, revenue for the current quarter will range from $9.2 billion up to $10 billion. This is slightly less than analysts’ modest expectations. This, apparently, also contributed to the drop in Qualcomm stock price following the release of financial stats. Representatives of the company noted that there was an increase in product inventories due to a sharp fall in demand and an improvement in the supply. In order to make the most of the surplus Qualcomm products stored in warehouses, it will be necessary to spend them for a few more quarters. Inventories should reach their maximum values this quarter.
QCT, which supplies chips for smartphones and other devices capable of transmitting data via wireless channels, saw the company earn $ 9.9 Billion in the quarter. This 28% increase over the previous year. The supply of chips for smartphones brought Qualcomm $6.57 Billion in the quarter. This is a 40% increase in core revenues compared to the quarter prior year. Revenue in the automotive business grew 58%, to $427 millions. The Internet of Things grew 24%, resulting in Qualcomm’s core revenue of $1.92 Billion. Final, RF components saw their revenue drop by 20% to $992 millions
Qualcomm’s technology and patent licensing revenue increased by 8% last quarter but still fell short of analysts expectations. Cristiano Amon, the head of the company Cristiano Amon (Cristiano Amon), acknowledged that Qualcomm can’t ignore the negative effects of macroeconomic conditions on all of the semiconductor industries. Expected reductions in operating expenses will be caused by the suspension of staff growth from October. But there are other factors.
Concerning customer relations, it was reported that Samsung Electronics extended its license agreement until 2030 and that in the next quarter, the Korean giant will increase Qualcomm’s share in its mobile devices. Qualcomm modems will be used in nearly all iPhones next year. Although the company has expressed concern that it won’t get more than 20%, Apple still has enough time to create modem solutions. Qualcomm management claims that Apple can still almost entirely abandon components from the original brands in a few years. Bloomberg forecasts that Apple’s first smartphones will feature modem components made by its own design no later than 2024.