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Even the iPhone can’t save Qualcomm from a slide

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Qualcomm said this week that it expects to supply most of the core chipsets for Apple’s iPhones in 2023, a meager 20% previously expected.

apple is widely expected to shift From Qualcomm Chip to Proprietary Chip – Built on Apple’s Chip Acquisition of Intel’s smartphone chipset business In 2019 – but that transition seems to be taking longer to implement than originally expected.

Additionally, Qualcomm reports significant profits in a number of new business areas. for example, As the Wall Street Journal pointed outQualcomm’s Internet of Things (IoT) business unit saw revenue increase 24% year-over-year, while automotive segment revenue increased 58% over the same period.

Indeed, Qualcomm’s overall revenue grew 22% year over year in its most recent quarter.

(Source: Qualcomm)

But Qualcomm’s shares plunged Thursday after weaker-than-expected prospects for its core mobile phone business and the smartphone industry in general. Qualcomm itself has implemented a hiring freeze since last month.

Qualcomm Chief Executive Officer Cristiano Amon said on the company’s quarterly conference call, “We remain resolute in managing our operating expenses, especially if the downturn becomes deeper or longer than expected.” Told. Seeking Alpha Transcript.

As pointed out by Reuters, Qualcomm’s earnings forecast for the quarter fell short of market expectations by a full $2 billion.Part of the problem, according to the company, is an oversupply of chipsets among customers, and part Furious Chipset Order during a pandemic. However, Qualcomm has also lowered its 2022 global 5G handset sales forecast to around 650 million units, from a previous forecast of up to 750 million units.

Bernstein financial analysts said in an investor note, according to Reuters, that “markets were weak and even the potential destocking was likely not completely unexpected, but the magnitude was likely Worse than some thought,” he wrote.

Let’s be clear: Qualcomm isn’t the only chipmaker suffering. Intel, AMD and others have issued similar warnings.

But Qualcomm’s Amon tried to stretch out to the horizon, claiming it was still clear.

“I want to remind everyone that the current inventory is a cyclical adjustment that does not affect the underlying long-term profitability of the company,” he said, likely referring to Qualcomm’s efforts. . Diversify beyond smartphones“We are on track to execute our growth strategy and all fundamentals are being maintained.”

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— Mike Dano, Editorial Director, 5G & Mobile Strategy, light reading | | @mikeddano

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