TechCentralTechCentral
    Facebook Twitter YouTube LinkedIn
    Facebook Twitter LinkedIn YouTube
    TechCentral TechCentral
    NEWSLETTER
    • News

      Floods blamed as gov’t falls behind in set-top box roll-out

      24 June 2022

      Vumacam announces big Jo’burg expansion drive

      24 June 2022

      Eskom crisis spirals: stage-4 power cuts this weekend

      24 June 2022

      Illegal strike at Eskom could make load shedding worse

      24 June 2022

      State capture probe ends but South Africa remains ‘broken’ by corruption

      23 June 2022
    • World

      Amazon has a plan to make Alexa mimic anyone’s voice

      24 June 2022

      Apple, Android phones hacked by Italian spyware

      24 June 2022

      Zendesk nears buyout deal with private equity firms

      24 June 2022

      Crypto crash survivors could become ‘tomorrow’s Amazons’

      23 June 2022

      Tether to launch a stablecoin tied to the British pound

      22 June 2022
    • In-depth

      The great crypto crash: the fallout, and what happens next

      22 June 2022

      Goodbye, Internet Explorer – you really won’t be missed

      19 June 2022

      Oracle’s database dominance threatened by rise of cloud-first rivals

      13 June 2022

      Everything Apple announced at WWDC – in less than 500 words

      7 June 2022

      Sheryl Sandberg’s ad empire leaves a complicated legacy

      2 June 2022
    • Podcasts

      How your organisation can triage its information security risk

      22 June 2022

      Everything PC S01E06 – ‘Apple Silicon’

      15 June 2022

      The youth might just save us

      15 June 2022

      Everything PC S01E05 – ‘Nvidia: The Green Goblin’

      8 June 2022

      Everything PC S01E04 – ‘The story of Intel – part 2’

      1 June 2022
    • Opinion

      Has South Africa’s advertising industry lost its way?

      21 June 2022

      Rob Lith: What Icasa’s spectrum auction means for SA companies

      13 June 2022

      A proposed solution to crypto’s stablecoin problem

      19 May 2022

      From spectrum to roads, why fixing SA’s problems is an uphill battle

      19 April 2022

      How AI is being deployed in the fight against cybercriminals

      8 April 2022
    • Company Hubs
      • 1-grid
      • Altron Document Solutions
      • Amplitude
      • Atvance Intellect
      • Axiz
      • BOATech
      • CallMiner
      • Digital Generation
      • E4
      • ESET
      • Euphoria Telecom
      • IBM
      • Kyocera Document Solutions
      • Microsoft
      • Nutanix
      • One Trust
      • Pinnacle
      • Skybox Security
      • SkyWire
      • Tarsus on Demand
      • Videri Digital
      • Zendesk
    • Sections
      • Banking
      • Broadcasting and Media
      • Cloud computing
      • Consumer electronics
      • Cryptocurrencies
      • Education and skills
      • Energy
      • Fintech
      • Information security
      • Internet and connectivity
      • Internet of Things
      • Investment
      • IT services
      • Motoring and transport
      • Public sector
      • Science
      • Social media
      • Talent and leadership
      • Telecoms
    • Advertise
    TechCentralTechCentral
    Home»World»Qualcomm bullish on sales despite Apple fight

    Qualcomm bullish on sales despite Apple fight

    World By Agency Staff2 November 2017
    Facebook Twitter LinkedIn WhatsApp Telegram Email

    Qualcomm issued a surprisingly bullish forecast for the current quarter, showing that robust demand for the company’s chips in China is making up for lost revenue from a bruising legal brawl with Apple.

    Sales in Qualcomm’s fiscal first quarter will be US$5.5bn to $6.3bn. Earnings per share, excluding some items, will be $0.85 to $0.95, the San Diego-based company said in a statement. Analysts expected $5.92bn and $0.91/share, on average, according to data compiled by Bloomberg.

    CEO Steve Mollenkopf is besieged by legal disputes with Apple, one of his largest customers, and government agencies around the world that threaten to undermine Qualcomm’s technology licensing business, which generates most of its profit. Still, the company’s chip unit, which contributes the majority of revenue, is winning market share from rivals and benefiting from demand for expensive phones in China.

    China remains strong. The end market continues to grow and average selling prices – the cost of devices – is holding up very nicely

    “China remains strong,” said Mollenkopf in a phone interview following the results. “The end market continues to grow and average selling prices — the cost of devices — is holding up very nicely.”

    Consumers in China, the world’s biggest smartphone market, are increasingly turning to more expensive devices, which use pricier Qualcomm chips and also generate higher licensing revenue.

    Qualcomm shares rose 1% in extended trading. Earlier, they had closed up 4.8% at $53.46 in regular New York trading. The shares are down about 20% this year and making it the worst performer on the benchmark Philadelphia Stock Exchange Semiconductor Index. Most chip stocks are up this year, leaving the index with a gain of about 40%.

    Qualcomm has seen off an attempt by rival MediaTek to break into the high end of the mobile chip business and taken sales from the Taiwanese company in the market for cheaper phones. Qualcomm’s ability to ride a wave of higher-priced gadgets and chips counters the usual deflationary trend in the industry, according to Raymond James & Associates analyst Chris Caso.

    ‘Unprecedented’

    “It’s unprecedented in consumer electronics,” he said. “It’s no secret that MediaTek has had struggles this year.”

    Qualcomm’s profit in the fiscal fourth quarter was $0.92/share, excluding certain items. Revenue was $6bn. Analysts had predicted adjusted earnings per share of $0.82 on revenue of $5.81bn.

    Still, the chip company posted its third consecutive annual revenue decline on Thursday and its legal woes may keep future sales under pressure. Licensing revenue in the current period will be $1.1bn to $1.3bn, the company said. That’s a decline of as much as 39% from a year earlier.

    Apple is set to ditch Qualcomm chips in the 2018 models of the iPhone and iPad

    Apple and regulators are challenging the way Qualcomm charges fees for patents that cover the fundamentals of modern phone systems. The company has been fined in South Korea and Taiwan, the US government is accusing it of antitrust violations and the European Union is also examining its practices.

    Apple and its backers want to change the way Qualcomm patent royalties are calculated. Instead of charging fees based on the price of phones, Apple wants it based on the cheaper price of modems. That component — which connect phones to cellular networks — usually costs about $20, while phones cost hundreds of dollars or more. To get their point across, these crucial customers are withholding payments to Qualcomm.

    It’s unprecedented in consumer electronics. It’s no secret that MediaTek has had struggles this year

    The company said on Thursday that it continues to exclude Apple patent fee payments from forecasts. Qualcomm also mentioned other companies, including Apple manufacturing partners, which haven’t paid fees. “We expect these licensees will continue to take such actions in the future until the respective disputes are resolved, Qualcomm said. Executives had no updates to share on the cases.

    The latest blow came earlier this week: Apple is designing iPhones and iPads for 2018 that don’t use components from Qualcomm, according to a person familiar with the matter. If that business went away it would cut Qualcomm revenue by about 7.5%, Raymond James & Associates estimates.

    Qualcomm is also trying to close its $47bn purchase of NXP Semiconductors. The deal is facing regulatory examination in Europe and opposition from some shareholders. Activist hedge fund firm Elliott Management has argued the offer undervalues NXP. Qualcomm had aimed to close the deal by the end of 2017. NXP management has said the process may stretch into next year.

    The deal is still on track but may close next year, Qualcomm’s chief financial officer George Davis said on Thursday. Higher than anticipated regulatory scrutiny has held it up, he added.  — Reported by Ian King, (c) 2017 Bloomberg LP

    Apple Qualcomm Steve Mollenkopf
    Share. Facebook Twitter LinkedIn WhatsApp Telegram Email
    Previous ArticleUK bank may be ‘criminally complicit’ in Gupta transfers
    Next Article Teraco selected as Microsoft Azure ExpressRoute partner

    Related Posts

    Amazon has a plan to make Alexa mimic anyone’s voice

    24 June 2022

    Apple, Android phones hacked by Italian spyware

    24 June 2022

    Zendesk nears buyout deal with private equity firms

    24 June 2022
    Add A Comment

    Comments are closed.

    Promoted

    Watch | Telviva One: adapting to the requirements of business

    24 June 2022

    Huawei P50 now available for pre-order in South Africa

    23 June 2022

    Calabrio paves way for SA’s cloud contact centre WFO journey alongside AWS

    23 June 2022
    Opinion

    Has South Africa’s advertising industry lost its way?

    21 June 2022

    Rob Lith: What Icasa’s spectrum auction means for SA companies

    13 June 2022

    A proposed solution to crypto’s stablecoin problem

    19 May 2022

    Subscribe to Updates

    Get the best South African technology news and analysis delivered to your e-mail inbox every morning.

    © 2009 - 2022 NewsCentral Media

    Type above and press Enter to search. Press Esc to cancel.