Despite a decent Q2, Qualcomm expects 30% drop in phone shipments next quarter

This week a handful of companies released quarterly earnings for Q2 2020, with a few able to stem the anticipated losses as a result of COVID-19 heavily impacting the manufacturing sector and supply chains, but warning that the next quarter would be more dire. Sharing this sentiment was Qualcomm, with the silicon maker expecting a drop in phone shipments in Q3 to be as large as 30 percent.

The firm posted its quarterly report earlier this week, and for the most part the numbers were relatively mixed. To that end Qualcomm was able to surpass its projected revenue, reaching $5.2 billion (projected $5.02 billion), but net income dropped significantly by 20 percent to $468 million year-on-year.

Shifting to next quarter’s outlook, the firm has highlighted three COVID-19-related factors which could impact sales over the coming months.

Namely, how governments plan to tackle the spread of the virus in their respective countries, and how this will impact consumer appetite and ability to purchase technology. Added to this is the expected demand for new smartphones sold by customers or licensees that use Qualcomm products, as well as the state of global supply chains, distribution networks, and workforces in general.

The mobile industry then, is facing many of the problems facing other industries at this time, and moving forward too.

There are also other factors cited by the firm, such as the ongoing disputes between Huawei and the United States, along with how the rollout of new networks, and 5G in particular, will be effected.

Interestingly, Qualcomm has not adjusted its projections as far as the shipments of 5G devices goes. The firm still expects to see an estimated 175 million to 225 million devices being shipped during 2020.

Whether the company is just saying this to remain positive during these testing times is unclear, but much of the firm’s future business will depend on the success of 5G, especially given the new chipsets that it has designed to support the broadband standard.

We have no idea what the current 5G shipment numbers are, but if the aforementioned projections are to be reached, a rather drastic turnaround and outlook need to happen in the latter half of year.

With more quarterly reports expected in coming weeks, it’s likely Qualcomm will not be the only ones advising investors of a poor third quarter.

Exit mobile version