Qualcomm Inc, the world’s biggest seller of smartphone processors, gave an upbeat forecast for sales and profit in the current period, suggesting demand for handsets is increasing after a two-year slump.
Revenue in the three months ended in June will be US$8.8 billion to US$9.6 billion, the company said in a statement Wednesday. Excluding certain items, earnings will be US$2.15 to US$2.35 a share. Analysts had projected sales of US$9.08 billion and earnings of US$2.16 a share.
The outlook signals that the smartphone market has begun to bounce back, tracking with Qualcomm’s forecast that demand would gradually recover this year. The San Diego-based company also reported better-than-predicted results in the January-to-March quarter — buoyed by headway in China, where it sells technology to local phone manufacturers.
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In the March quarter, profit was US$2.44 a share, excluding some items. Revenue rose 1 percent to US$9.39 billion. Analysts had estimated profit of US$2.32 and sales of US$9.32 billion.
Revenue from the smartphone segment gained 1 percent last quarter, a slowdown from the 16 percent increase in the previous three months.
But China was a bright spot, as sales to phone makers in that country, the biggest market for the devices, surged 40 percent in the first half of the fiscal year, “reflecting our strong competitive positioning and recovery of demand,” the company said.
In that market, Qualcomm chief executive officer Cristiano Amon said customers, including Xiaomi Corp (小米), Honor Terminal Co (榮耀), OnePlus Technology Co (萬普拉斯科技), Oppo and Vivo Communication Technology Co (維沃), are fueling demand. They’re not losing smartphone market share to a resurgent Huawei Technologies Co (華為) in China, he added.
Amon said that Huawei’s reentry into the market has helped stoke interest in the Android operating system, which is often paired with Qualcomm chips.
“We have not seen signs of weakness in the Android premium market in China,” he said.
Huawei has been blacklisted by the US government, and Amon pointed out that Qualcomm only sells less-advanced 4G phone parts to the company — in line with US trade restrictions. His company expects that business to wind down to nothing next year.
Apple Inc and Samsung Electronics Co are major phone customers of Qualcomm. But Apple’s iPhone relies on Qualcomm for connectivity chips, rather than the main processor.
Qualcomm’s Internet of Things group, which creates electronics for Web-connected appliances, has suffered from a glut of inventory. Revenue at that unit was down 11 percent last quarter. Qualcomm’s automotive sales rose 35 percent.
An additional portion of Qualcomm’s profit comes from licensing the fundamental technology that underpins all modern mobile networks. Phone manufacturers pay these fees whether they use Qualcomm-branded chips or not.
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