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Qualcomm revenues drop due to China difficulties

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Qualcomm revenues fell by 13 per cent year-on-year to $4.9 billion during the third quarter of 2019, with struggles in China named as the main culprit.

In particular, the company suffered from Huawei’s gains in its home market. Qualcomm is a major supplier for the likes of Xiaomi and Oppo, but Huawei manufacturers many of its components – including processors – in-house.

Combined with the fact that many manufacturers are managing inventory as they prepare for the launch of 5G handsets over the next year or so, and it was a challenging quarter for the San Diego-based chip giant.

Qualcomm Q3

However, the company is confident that demand for 5G components coupled with licensing fees for its patents will see it in a better place by 2020.

“Today, we are the only chipset vendor that has 5G system level solutions spanning both sub6 GHz and millimetre bands,” declared CEO Steve Mollenkopf. “This is key to global deployments.

“On the product side, our 5G design wins have doubled since our last earnings call.  We now have over one hundred fifty 5G designs launched or in-development using our 5G chipsets. In addition to core chipsets, virtually all our 5G design wins are powered by our complete RF Front-End solutions for 5G Sub6 and / or millimetre wave.  We are the only company today delivering an end-to-end comprehensive modem-to-antenna solution.

“Put simply, our position – at the center of developing this incredible technology – represents a large opportunity for our stockholders. By the first calendar quarter of 2020, we anticipate reaching the inflection point as our financial results.”

Aside from its operating income, Qualcomm recognised a payment of up to $4.7 billion from Apple in its quarterly results. The payment is for unpaid royalties during the two firms patent dispute, which was resolved earlier this year.