Close Menu
TechCentralTechCentral

    Subscribe to the newsletter

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

    Facebook X (Twitter) YouTube LinkedIn
    WhatsApp Facebook X (Twitter) LinkedIn YouTube
    TechCentralTechCentral
    • News

      World Bank set to back South Africa’s big energy grid roll-out

      20 June 2025

      The algorithm will sing now: why musicians should be worried about AI

      20 June 2025

      Sita hits back at critics, promises faster, automated procurement

      20 June 2025

      The transatlantic race to create the first television

      20 June 2025

      Listed: All the MVNOs in South Africa – 2025 edition

      19 June 2025
    • World

      Watch | Starship rocket explodes in setback to Musk’s Mars mission

      19 June 2025

      Trump Mobile dials into politics, profit and patriarchy

      17 June 2025

      Samsung plots health data hub to link users and doctors in real time

      17 June 2025

      Beijing’s chip champions blacklisted by Taiwan

      16 June 2025

      China is behind in AI chips – but for how much longer?

      13 June 2025
    • In-depth

      Meta bets $72-billion on AI – and investors love it

      17 June 2025

      MultiChoice may unbundle SuperSport from DStv

      12 June 2025

      Grok promised bias-free chat. Then came the edits

      2 June 2025

      Digital fortress: We go inside JB5, Teraco’s giant new AI-ready data centre

      30 May 2025

      Sam Altman and Jony Ive’s big bet to out-Apple Apple

      22 May 2025
    • TCS

      TCS+ | AfriGIS’s Helen Hulett on how tech can help resolve South Africa’s water crisis

      18 June 2025

      TechCentral Nexus S0E2: South Africa’s digital battlefield

      16 June 2025

      TechCentral Nexus S0E1: Starlink, BEE and a new leader at Vodacom

      8 June 2025

      TCS+ | The future of mobile money, with MTN’s Kagiso Mothibi

      6 June 2025

      TCS+ | AI is more than hype: Workday execs unpack real human impact

      4 June 2025
    • Opinion

      South Africa pioneered drone laws a decade ago – now it must catch up

      17 June 2025

      AI and the future of ICT distribution

      16 June 2025

      Singapore soared – why can’t we? Lessons South Africa refuses to learn

      13 June 2025

      Beyond the box: why IT distribution depends on real partnerships

      2 June 2025

      South Africa’s next crisis? Being offline in an AI-driven world

      2 June 2025
    • Company Hubs
      • Africa Data Centres
      • AfriGIS
      • Altron Digital Business
      • Altron Document Solutions
      • Altron Group
      • Arctic Wolf
      • AvertITD
      • Braintree
      • CallMiner
      • CYBER1 Solutions
      • Digicloud Africa
      • Digimune
      • Domains.co.za
      • ESET
      • Euphoria Telecom
      • Incredible Business
      • iONLINE
      • Iris Network Systems
      • LSD Open
      • NEC XON
      • Network Platforms
      • Next DLP
      • Ovations
      • Paracon
      • Paratus
      • Q-KON
      • SevenC
      • SkyWire
      • Solid8 Technologies
      • Telit Cinterion
      • Tenable
      • Vertiv
      • Videri Digital
      • Wipro
      • Workday
    • Sections
      • AI and machine learning
      • Banking
      • Broadcasting and Media
      • Cloud services
      • Contact centres and CX
      • Cryptocurrencies
      • Education and skills
      • Electronics and hardware
      • Energy and sustainability
      • Enterprise software
      • Fintech
      • Information security
      • Internet and connectivity
      • Internet of Things
      • Investment
      • IT services
      • Lifestyle
      • Motoring
      • Public sector
      • Retail and e-commerce
      • Science
      • SMEs and start-ups
      • Social media
      • Talent and leadership
      • Telecoms
    • Events
    • Advertise
    TechCentralTechCentral
    Home » World » Qualcomm bullish on sales despite Apple fight

    Qualcomm bullish on sales despite Apple fight

    By Agency Staff2 November 2017
    Twitter LinkedIn Facebook WhatsApp Email Telegram Copy Link
    News Alerts
    WhatsApp

    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
    Subscribe to TechCentral Subscribe to TechCentral
    Share. Facebook Twitter LinkedIn WhatsApp Telegram Email Copy Link
    Previous ArticleUK bank may be ‘criminally complicit’ in Gupta transfers
    Next Article Teraco selected as Microsoft Azure ExpressRoute partner

    Related Posts

    Stolen phone? Samsung now buys you an hour to lock it down

    18 June 2025

    Samsung plots health data hub to link users and doctors in real time

    17 June 2025

    10 red flags for Apple investors

    13 June 2025
    Company News

    Making IT happen: how Trade Link gears up to enable SA retail strategies

    20 June 2025

    Why parents choose CambriLearn for online education

    19 June 2025

    Disrupt first, ask questions later – the uncomfortable truth about incident response

    18 June 2025
    Opinion

    South Africa pioneered drone laws a decade ago – now it must catch up

    17 June 2025

    AI and the future of ICT distribution

    16 June 2025

    Singapore soared – why can’t we? Lessons South Africa refuses to learn

    13 June 2025

    Subscribe to Updates

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

    © 2009 - 2025 NewsCentral Media

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