Qualcomm Inc, the biggest maker of mobile-phone chips, reduced its forecast for revenue and profit this year, reflecting lost semiconductor orders at a major customer and more competition in China.
The lower estimates sent the shares tumbling in extended trading as investors confronted the first real signs of a slip in Qualcomm’s grip on the smartphone-chip market.
Its products and technology have dominated the industry for years as demand has soared for Internet-ready mobile devices.
A large customer has decided not to use Qualcomm’s Snapdragon chip in a flagship phone design, chief executive officer Steve Mollenkopf said on Wednesday.
Earlier this month, Bloomberg News reported that Samsung Electronics Co, the world’s biggest smartphone maker, had decided to use its own processor in its new Galaxy S handset.
“What seemed like an insurmountable market position is now being challenged,” Topeka Capital Markets analyst Suji De Silva said. “That’s just technology. It’s a competition.”
Sales for fiscal 2015 would be US$26 billion to US$28 billion, the San Diego-based company said in a statement. Profit excluding certain costs for the year would be US$4.75 to US$5.05 a share. The company previously projected as much as US$28.8 billion in revenue and US$5.35 in per-share profit.
“We expect not to be in a design launching in the second half of the year,” Mollenkopf said.
Qualcomm’s 810 Snapdragon processor has no performance issues and would be used in more than 60 other phones, he said.
“We’re quite pleased with the device — we just wish it had won one more design.”
After three years of having the market for the newest Long-Term Evolution (LTE) modem chips almost to itself, Qualcomm is now starting to face competition as rivals introduce their own LTE products.
The company’s market share in LTE chips dropped to less than 80 percent in the third quarter for the first time, from 95 percent a year earlier, according to researcher Strategy Analytics.
Qualcomm remains the dominant supplier of chips that connect phones to the fastest cellular networks, enabling it to benefit from surging consumer demand for accessing the Internet on the go. The semiconductor business provides the company with about 70 percent of its sales.
Mollenkopf said the company gave its competition an opportunity by using a generic chip design from ARM Holdings Plc in its latest processor — something rivals can also use.
Qualcomm would revert to designing its own processor core in new products to debut later this year, he said.
In China, where Qualcomm is facing more competition in mid-priced phones, the market would migrate to more expensive handsets that would need the company’s higher-end modem chips, he said.
While the loss of orders from Samsung would hurt, that might be balanced out by new customers like China’s Xiaomi Corp (小米), said Alex Gauna, an analyst at JMP Securities, who has a buy rating on Qualcomm stock.
“Samsung isn’t what it used to be,” he said.
A record quarter for Apple Inc’s iPhone, which uses a Qualcomm modem chip, helped the chipmaker’s earnings.
For the period that ended on Dec. 28 last year, Qualcomm’s net income rose to US$1.97 billion, or US$1.17 a share, from US$1.88 billion, or US$1.09, a year earlier.
Napoleon Osorio is proud of being the first taxi driver to have accepted payment in bitcoin in the first country in the world to make the cryptocurrency legal tender: El Salvador. He credits Salvadoran President Nayib Bukele’s decision to bank on bitcoin three years ago with changing his life. “Before I was unemployed... And now I have my own business,” said the 39-year-old businessman, who uses an app to charge for rides in bitcoin and now runs his own car rental company. Three years ago the leader of the Central American nation took a huge gamble when he put bitcoin
TECH RACE: The Chinese firm showed off its new Mate XT hours after the latest iPhone launch, but its price tag and limited supply could be drawbacks China’s Huawei Technologies Co (華為) yesterday unveiled the world’s first tri-foldable phone, as it seeks to expand its lead in the world’s biggest smartphone market and steal the spotlight from Apple Inc hours after it debuted a new iPhone. The Chinese tech giant showed off its new Mate XT, which users can fold three ways like an accordion screen door, during a launch ceremony in Shenzhen. The Mate XT comes in red and black and has a 10.2-inch display screen. At 3.6mm thick, it is the world’s slimmest foldable smartphone, Huawei said. The company’s Web site showed that it has garnered more than
Vanguard International Semiconductor Corp (世界先進) and Episil Technologies Inc (漢磊) yesterday announced plans to jointly build an 8-inch fab to produce silicon carbide (SiC) chips through an equity acquisition deal. SiC chips offer higher efficiency and lower energy loss than pure silicon chips, and they are able to operate at higher temperatures. They have become crucial to the development of electric vehicles, artificial intelligence data centers, green energy storage and industrial devices. Vanguard, a contract chipmaker focused on making power management chips and driver ICs for displays, is to acquire a 13 percent stake in Episil for NT$2.48 billion (US$77.1 million).
CROSS-STRAIT TENSIONS: The US company could switch orders from TSMC to alternative suppliers, but that would lower chip quality, CEO Jensen Huang said Nvidia Corp CEO Jensen Huang (黃仁勳), whose products have become the hottest commodity in the technology world, on Wednesday said that the scramble for a limited amount of supply has frustrated some customers and raised tensions. “The demand on it is so great, and everyone wants to be first and everyone wants to be most,” he told the audience at a Goldman Sachs Group Inc technology conference in San Francisco. “We probably have more emotional customers today. Deservedly so. It’s tense. We’re trying to do the best we can.” Huang’s company is experiencing strong demand for its latest generation of chips, called
RSS