With over 60% of Qualcomm’s revenue last quarter coming from mobile device chips, the company’s quarterly report provides insight into what’s happening in the smartphone market. Revenue in this area decreased 18% to $5.75 billion, although it grew by 40% a quarter earlier. Qualcomm’s management expects surplus stock to remain until the middle of this year.
Image Source: Reuters, Aly Song
The total revenue of Qualcomm in the last quarter decreased by 12% to $9.46 billion, which was significantly below analysts’ expectations ($9.6 billion). “The mobile phone industry continues to experience subdued demand and we now expect increased inventory levels in supply chains to continue through at least the end of the first half of calendar year 2023,” CEO Cristiano Amon said at the event. According to him, measures will be taken to reduce costs and optimize operations.
A “ray of light in a dark realm” may be the Automotive Components business, where Qualcomm showed revenue growth of 58% to $456 million, but expects revenue to remain at its current level in the current quarter. A highlight of the past quarter was Qualcomm’s decision to invest in Ampere, Renault’s electric vehicle and software company.
Qualcomm’s total revenue for the current quarter should be in the range of $8.7 billion to $9.5 billion, according to company management, which is slightly below analysts’ expectations, which expected $9.55 billion. if Qualcomm’s prediction comes true.
Net profit in the last quarter fell by 34% to $2.24 billion. In addition to macroeconomic factors, which Apple has already referred to the day before, Qualcomm representatives also mentioned maintaining a high level of stocks of finished products. Demand for smartphones, according to the head of Qualcomm, sank the most in the lower and middle price ranges.
Speaking about the possible implications of the US authorities’ recent decision to stop issuing new export licenses for the supply of components for Huawei Technologies, Alex Rogers, President of Global Licensing of Qualcomm, explained that the company retains the ability to supply this Chinese customer with chips for 4G and Wi-Fi, as U.S. regulators have determined that these supplies do not adversely affect U.S. national security. As a result, Qualcomm expects to continue such deliveries for several more years.
Qualcomm’s technology licensing revenue fell 16% to $1.52 billion, falling short of analysts’ expectations of $1.54 billion. consumer and commercial sectors.
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