The chip group Qualcomm expects an even stronger decline in the smartphone market than previously expected. Especially for smartphones with super-fast 5G data transfer technology, Qualcomm expects to sell only 600 to 650 million devices instead of the previous forecast of up to 750 million. The company that powers the main processors of many Android smartphones, as well as most 5G cellular modems, is a good business barometer.
According to calculations by analysis company Canalys, smartphone sales fell by nine percent in the last quarter. Apple was the only major provider that could increase sales with its iPhones.
For calendar year 2022, Qualcomm now predicts smartphone sales will shrink in the low double-digit percentage. So far, the company has been preparing for a revenue decline in the mid-single digit percentage range. Qualcomm sees “a rapid decline in demand” and has therefore been cautious in forecasting its own operations. Shares fell by a good 7.5 percent in after-hours trading on Wednesday.
Apple still needs Qualcomm modems
On the sidelines of the numbers, Qualcomm gave a clear indication that Apple is making slower than planned progress in its plan to switch to 5G modems developed in-house in the iPhones. So far, Qualcomm estimates that only about a fifth of the 2023 model year iPhones will be equipped with wireless modems. Now it was said that it would be the clear majority of the aircraft. Only in 2025 is it expected that hardly any modems will be delivered to Apple.
The financial service Bloomberg had previously reported that Apple was struggling with problems such as excessive heat generation with its own modems. The chips that provide the connection to the mobile network are an important part of smartphones and play an important role in the battery life, among other things. Apple is gradually replacing chips from other suppliers in its devices with its own developments that are more efficient and powerful. The iPhone group was embroiled in a bitter patent dispute with Qualcomm for years.
Forecast revised down
Qualcomm now expects revenue of $9.2 to $10 billion in the first quarter of its fiscal year, which ends in December. Last year’s quarter, revenue was $10.7 billion after a 30 percent jump. Profits will suffer as some smartphone providers are now reducing inventories rather than building new devices, it said.Qualcomm managed to maintain a fairly high rate of growth in the quarter. Revenue grew 22 percent year over year to approximately $11.4 billion. Profits rose 3% to $2.87 billion.
Source: Krone
I’m Wayne Wickman, a professional journalist and author for Today Times Live. My specialty is covering global news and current events, offering readers a unique perspective on the world’s most pressing issues. I’m passionate about storytelling and helping people stay informed on the goings-on of our planet.
