The chip group Qualcomm does not see any recovery in global smartphone sales anytime soon and is responding with further job cuts. The group did not provide any information on how many jobs should be eliminated, but promised “significant” costs for severance payments. Qualcomm expects the smartphone market to shrink in the high single-digit percentage range this year.
The US company has good insight into this: Qualcomm supplies the modems for connecting to the mobile network in phones from many providers, as well as the processors in numerous smartphones with Google’s Android operating system.
No more dealings with Apple from 2024
For the fall, Qualcomm expects the usual boost for business from the launch of the new iPhone generation. The San Diego-based company supplies the modems for Apple phones. At least for now: Qualcomm confirmed on Wednesday that it would no longer do business with Apple after 2024. The iPhone group is working on its own built-in modems. However, it is unclear when they will be finished.
In the past quarter, the decline in smartphone sales continued to weigh heavily on Qualcomm’s business. Sales fell 23 percent year-on-year to approximately $8.45 billion. Profits fell by a good half to 1.8 billion dollars (1.65 billion euros).
Technology for cars as a further mainstay
Revenues from the smartphone business fell by a quarter to a good $5.2 billion in the third fiscal quarter that ended in June. According to calculations by the market research company IDC, smartphone sales fell by around nine percent in the past quarter.
Qualcomm posted a 13 percent increase in technology for cars to $434 million. The group is trying to make the business with networked and self-driving cars another mainstay.
For the current quarter, Qualcomm forecast sales of between $8.1 billion and $8.9 billion. Analysts had expected more for both the past quarter and the forecast. The stock fell nearly 7 percent in after-hours trading.
