Without selling to Huawei, Qualcomm still had a business quarter that exceeded expectations
- Tram Ho
Despite not being sold to Huawei, Qualcomm’s fourth-quarter results exceeded analysts’ expectations, showing solid growth in its licensing business. Moreover, the company expects that the commercialization of 5G will continue to push the company’s revenue even higher next year.
Qualcomm’s total quarterly revenue as of September was only $ 4.81 billion, down $ 1 billion from the same period last year. However, this figure is still higher than Wall Street analysts’ expectation of only $ 4.76 billion, due to the impact of the US-China trade conflict.
” Our business prospects are affected by many factors, including weakening demand in China and certain developed regions, Huawei’s market share in China and the stock situation. 4G components from OEMs before moving to 5G . ” Akash Palkhiwala, Qualcomm’s newly appointed CFO.
The company’s licensing business, which generates revenue from patents and other licensing agreements, grew 4% from the previous quarter, even though there was no revenue from Huawei in the period. this paragraph. This growth comes in part from the royalties settlement agreement of Apple and its manufacturers.
Qualcomm expects revenue in the first fiscal quarter of 2020 (ending in December 2019) to range from $ 4.4 billion to $ 5.2 billion. The forecast does not take into account revenue from Huawei as the US government continues to maintain a ban on U.S. companies from selling technology to the Chinese company. Moreover, the two companies have not yet settled the patent licensing dispute.
” Our revenue forecast does not include Huawei, as the prospects for resolution are getting further out of reach .” Palkhiwala said.
In the future, Qualcomm is betting that its growth will be based on the commercialization of 5G, especially in China. In October, all three Chinese mobile carriers launched 5G services in the world’s largest smartphone market.
” We estimate that by the end of this year, these three major carriers will deploy a total of about 130,000 5G stations .” Qualcomm CEO Steve Mollenkopf said. ” We further estimate that by the end of 2025, the number of 5G stations deployed will increase to nearly 1 million, which is 10 times the size of the entire network of the largest operator in the US .”
But the competition in China is also very fierce.
Huawei is one of Qualcomm’s key customers, when it buys chips from the US company for its smartphones. However, Huawei’s chip development division, HiSilicon, is a competitor to Qualcomm as it also develops 5G mobile chips.
The U.S. export ban has forced Huawei to use more of its own-developed chips, which has also helped Huawei increase its chip market share in China.
Qualcomm shares were up more than 5% in the trading session after earnings reports.
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Source : Trí Thức Trẻ