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Qualcomm expects phone sales to dip by 15 percent because of COVID
Qualcomm said Wednesday that it expects global smartphone sales to fall by 15 percent over the next three months, due to the coronavirus.
Qualcomm, which sells many of the smartphone processors and radios that go into the world’s smartphones, said that the coronavirus would slow sales for its current fourth fiscal quarter. Qualcomm reported third-quarter fiscal results on Wednesday.
“Our guidance for the fourth quarter of fiscal 2020 includes an impact of greater than ($0.25) to EPS attributable to a planning assumption of an approximate 15 percent year-over-year reduction in handset shipments due to COVID-19, including a partial impact from the delay of a global 5G flagship phone launch.” Qualcomm said in a statement accompanying its earnings results.
Reuters reported that the 5G smartphone vendor in question was believed to be Apple.
Qualcomm reported net income of $845 million on revenue of $4.893 billion. Those figures dropped precipitously from a year ago, when the company reported $2.15 billion of profits on revenue of $9.635 billion. However, the results from a year ago also included $4.7 billion of revenue from Apple via a settlement agreement.
In July 2020, the company also entered into a settlement agreement with Huawei, including a patent cross-licensed. In its fourth fiscal quarter, that agreement will pay Qualcomm $1.8 billion plus whatever royalties come from the settlement, Qualcomm said.