Qualcomm boosts phone chip sales and introduces affordable 5G chip in India
- Qualcomm beats estimates with a 12% increase in phone chip sales, signaling recovery in smartphone sales.
- Qualcomm launches Snapdragon 4s Gen 2 chip for 5G smartphones under $100 in India and other emerging markets.
- Manufacturers in India struggling to attract feature phone buyers amid 5G shortage may benefit from Qualcomm's affordable chip.
Qualcomm has announced a net income of $2.13 billion, or $1.88 per share, for the recent quarter, marking an increase from $1.8 billion, or $1.60 per share, in the same period last year. The company anticipates sales between $9.5 billion and $10.3 billion for the upcoming quarter, slightly below Wall Street's expectation of $9.71 billion. Analysts had projected per share earnings of $2.45, while Qualcomm's guidance ranges from $2.38 to $2.58. The company’s handsets business, which focuses on processors and modems for smartphones, saw a 12% revenue increase to $5.9 billion, indicating a potential recovery in the smartphone market. In addition to its core smartphone business, Qualcomm reported a significant 87% year-over-year increase in automotive revenues, reaching $811 million. The company is also focusing on the Internet of Things (IoT) sector, although IoT revenue fell 8% to $1.4 billion, surpassing expectations. Overall, Qualcomm's chip business, reported as QCT, generated $8.1 billion in sales, a 12% increase from the previous year. Licensing revenue also rose by 3% to $1.3 billion, while the company returned $949 million in dividends and repurchased $1.3 billion worth of shares. In the Indian smartphone market, Qualcomm is addressing a decline in entry-level feature phone sales, primarily due to a lack of affordable 5G models. The entry-level segment saw a 14% year-on-year decline, with 5.1 million units shipped. Qualcomm plans to introduce its Snapdragon 4s Gen 2 chip to fill this gap, with Xiaomi set to launch a device based on this chip later this year. The new chip, designed for lower-cost 5G phones, supports stand-alone 5G deployment, which is currently offered by Jio, India's leading telecom operator. Despite aggressive efforts by smartphone vendors to deliver affordable 5G devices, challenges remain in convincing users to upgrade. IDC's Kiranjeet Kaur highlighted concerns regarding the perceived benefits of migrating to 5G, including additional costs and potential compromises in smartphone features. As Qualcomm continues to innovate and adapt to market demands, its strategic focus on both high-end and entry-level segments may position the company for sustained growth in the evolving tech landscape.