Qualcomm said its revenue fell 17 percent to $9.275 billion for its fiscal second quarter ended March 26, 2023 from $11.164 billion.
Qualcomm’s chipset business delivered revenues of $7.9 billion (–17 percent), while licensing business added revenues of $1.3 billion (–18 percent).
Qualcomm has generated revenue of $6.105 billion (–17 percent) from Handsets clients; $447 million (+20 percent) from Automotive and $1.39 billion (–24 percent) from IoT clients during the quarter.
Qualcomm did not reveal any update on job cutting program. Qualcomm said in its earnings report said that “it will evaluate and execute additional cost-reduction opportunities to help exceed our operating expense target.”
Qualcomm is targeting to generate revenue of $8.1 billion – $8.9 billion during the third quarter of the fiscal.
Qualcomm is expecting a high single-digit percentage drop in smartphone sales in 2023, indicating tough business conditions for the chipset major.
The company said a larger-than-normal decline in its chip revenue forecast from the prior quarter was mainly due to the timing of purchases by a modem-only handset customer.
Qualcomm did not name the customer, but Kinngai Chan, analyst at Summit Insights Group, said it was Apple, which makes its own application processor.
Apple is the largest purchaser of Qualcomm’s standalone modem chips, instead of its main flagship chip which includes a modem and an application processor.
CEO Cristiano Amon said that when Huawei Technology left the smartphone market, Apple picked up some of its premium-handset market share, resulting in a net loss for Android phones powered by Qualcomm’s flagship processors.
Qualcomm also faces competition, especially for high end smartphone chips, from Taiwan’s MediaTek.
“MediaTek is pushing hard into the high-end market,” said Runar Bjorhovde, analyst at research firm Canalys.
MediaTek earlier said its first-quarter revenue was NT$95.652 billion, down 11.6 percent sequentially and 33 percent year-over-year, mainly due to customers’ inventory adjustments.
Qualcomm in business
Qualcomm said it supplied Snapdragon 8 Gen 2 mobile platforms to Android-based smartphone makers such as Samsung, Xiaomi, Vivo, Oppo, OnePlus, Honor, Motorola, ASUS and ZTE.
Qualcomm said it is seeing excellent adoption of Snapdragon 7+ Gen 2 mobile platform among Chinese OEMs, resulting in share gains. OEMs are also reporting strong initial sales for products powered by the 7+ Gen 2.
Qualcomm’s automotive business will partner with Mercedes-Benz for supplying Snapdragon Digital Cockpit platforms. The new platforms will be featured in Mercedes vehicles beginning in 2023.
Qualcomm said Xpeng P7i and Lotu’s new Eletre SUV will use Snapdragon Cockpit platform. Qualcomm won 12 new designs across Snapdragon Cockpit and Snapdragon Connectivity 5G platforms with automakers across the globe.
Qualcomm’s IoT business
Dell launched the Inspiron 14-inch laptop powered by the Snapdragon 8cx Gen 2 Compute platform. In addition to OEMs, Qualcomm is expanding IoT ecosystem across hardware, software, ODM and channel partners.
Qualcomm is launching the Windows on Snapdragon developer portal to enable consumer and enterprise ISVs to test, port and optimize their applications directly on Qualcomm Silicon.
Qualcomm is collaborating with Reliance Jio on rolling out 5G FWA across India, servicing millions of residents.
Qualcomm recently announced the Qualcomm 5G Fixed Wireless Access Platform Gen 3, offering operators the ability to expand their service coverage to new areas while lowering cost and enabling faster deployment.
Qualcomm is leading the transition to Wi-Fi 7 with more than 175 cumulative designs across all product categories.