5G whizz, Qualcomm: Is that a $1bn hole in your Q4 revenues or are you just happy to see us?
Mobe chip flinger's investors seem chilled, though, as it predicts 2020 bonanza
In the driver's seat of the 5G hype bus right now is mobile chip designer Qualcomm with its forecast that up to 225 million smartphones running on the next-generation chipsets will find a buyer in 2020.
This is way higher than IDC's estimates of 123.5 million units or the relatively paltry 120 million anticipated by Goldman Sachs, but below the 300 million units touted by semiconductor pal TSMC last month.
"We are estimating 175 million to 225 million 5G handset units in calendar 2020," said newly installed CFO Akash Palkhiwala on a conference call with analysts. The company expects smartphone shipments to rise 3 per cent next year, following the record drop analysts forecast in 2019.
Qualcomm said there are now over 40 OEMs and 30 operators launching or announcing 5G products or commercial services. Back in September, it announced plans to expand its 5G mobile platforms into the Snapdragon 7 and 6 Series, set to launch in Q1 next year.
"We now have over 230 5G design wins launched or in development, up from 150 in the prior quarter, virtually all of which are using our RF front-end solutions for 5G sub-6 and or millimetre wave," said Palkhiwala.
Outside of smartphone hardware, Qualcomm is gunning for customers in the automotive industry and in the wider computing space.
5G distractions are good when there's a $1bn hole in your Q4 revenues, which Qualcomm last night reported (PDF) for the period ended 29 September.
Despite this, Wall Street types smiled on Qualcomm as the top line came in at $4.8bn, higher than analyst estimates of $4.76bn but down 17 per cent on the year ago period.
The Qualcomm CDMA Technologies (QCT) (chipset) arm declined 22 per cent to $3.611bn. The business shifted 152 million chips, down 34 per cent year-on-year. The licensing division, QTL, returned to growth, up 4 per cent to $1.158bn, due to "higher unit and a stronger mix". A renewed agreement with Apple helped out.
The company said it had received $450m paid under a second interim agreement with Huawei that concluded in the third quarter of fiscal '19, and "although negotiations continue, we have not reached a final agreement with Huawei".
"We did not record any revenues in the fourth quarter of fiscal 2019 for royalties due on the sales of Huawei's products," Qualcomm added.
Qualcomm is back in the black to the tune of $506m versus a loss of $513m in Q4 a year earlier, when Apple halted use of its chips as a heated patent-licence battle continued. That spat was resolved and a six-year licensing pact was established from 1 April 2019.
The global 3G, 4G and 5G device forecasts for calendar 2020 is between 1.7 billion and 1.8 billion, the CFO added. "Our business outlook is impacted by several factors including weaker demand in China and certain developed regions; Huawei share gain in China; and OEMs managing 4G inventory ahead of the transition".
For the year, Qualcomm reported revenue of $24.3bn, up 7 per cent, and it recorded net profit of $4.4bn, versus a $5.5bn loss last year.
Revenues of $4.4bn to $5.2bn are forecast for Q1, excluding royalty payments from Huawei, should the pair not reach an agreement. Revenues came in at $4.8bn in Q1 of fiscal '19. ®