Strong 5G Demand Helps Qualcomm Mitigate Chip Market Slump

Qualcomm recently reported its second-quarter earnings spanning January through March of 2020 with revenue of $5.21 billion and earnings-per-share of $0.88. The company also forecasts that its current-quarter revenue is holding up as per the expectations. The reason being more contracts and demand for 5G phones with high-priced chips, which in turn, is helping mitigate the impact of Coronavirus on the chip market.

As reported by Reuters, Qualcomm also beat Wall Street estimates for second-quarter profit and revenue. Its shares are now up by 5% in trading. Qualcomm also said that the Coronavirus Pandemic led to a drop in demand for handsets by about 21% in the second quarter from a year earlier.

It has further predicted a 30% reduction in phone shipments during May-June. This drop in sales will lead to less profit and revenue for Qualcomm. However, demand for high-end chips is helping Qualcomm since the company has sold chips at an average price of $31.8 compared to $23.

In related news, Qualcomm recently announced a pair of new Bluetooth systems-on-a-chip (SoC) namely, QCC514X (for premium range) and QCC304X (entry-level and mid-range) series, that will be integrated into its truly wireless earbuds. Both the Bluetooth chipsets will bring more premium-range features like noise cancellation and voice assistant support to mid-range and entry-level Bluetooth earphones.

Qualcomm also launched three new chipsets in India earlier this year including Snapdragon 720G, Snapdragon 662, and Snapdragon 460, which will enable enhanced user experiences across connectivity, gaming and entertainment. These new models would also provide faster 4G connectivity with Wi-Fi 6 and Bluetooth 5.1 support.