Qualcomm predicts phone shipments will drop by 30 percent

Qualcomm has perhaps made a number of missteps with the Snapdragon 865 that resulted in more expensive Android phones, while OEM’s like Nokia, LG, Motorola and others opted to utilize the Snapdragon 765G instead. But its current woes are mostly squarely being blamed on the contraction of the market during life under Corona.

Qualcomm reported that it expects smartphone shipments to drop 30% in the coming months due to the pandemic and it is using that to cut its previous projections for next quarter. Qualcomm reported that it saw a 21% reduction in demand for phones during the last quarter.

It is not all doom and gloom for Qualcomm as they reported that they managed to beat its Q2 revenue expectations despite the dramatic drop in demand. Q2’s revenue was $5.2 billion, while its net income dropped by 29% YOY. Qualcomm called out three major Coronavirus related factors that Qualcomm sites as impacting sales in the next few months:

• How the COVID-19 virus, and government policies around the world to prevent its spread, will impact business and consumer confidence
• Demand for new smartphones sold by customers or licensees that use Qualcomm products
• The state of the global wireless supply chain, distribution networks, and workforces

Among the non-Coronavirus related reasons Qualcomm believes affected its sales is its licensing dispute with Huawei, network rollouts, its dependance on a “small number of customers and licensees” and the premium-tier devices on the market. Qualcomm is expecting to see 175 million phones and 225 million 5G phone shipments this year.

Source: Qualcomm