Qualcomm predicted it would reap as much as $4.7 billion in revenue in the current quarter from its recent settlement with Apple, an expectation which was offset by a gloomy forecast for chip shipments.
Guidance for Qualcomm’s fiscal Q3 (the three months to end-June) includes estimated revenues of between $4.5 billion to $4.7 billion from the deal, consisting of “a payment from Apple and the release of our obligations to pay or refund Apple and the contract manufacturers”.
Alex Rogers, president of Qualcomm’s patent licensing business, said on a company earnings call it believes the settlement with Apple “enhances our ability” to resolve an outstanding patent licensing dispute with Huawei.
However, CEO Steve Mollenkopf warned Qualcomm’s fiscal year will continue to be marred by a slowdown in the device market, with particular weakness in China.
While net income more than doubled year-over year to nearly $663 million in Qualcomm’s fiscal Q2 (three months ended 31 March), revenue dropped 5 per cent to $5 billion. Fiscal Q3 revenue excluding the Apple settlement was forecast to total between $4.7 billion and $5.5 billion, which taken alone would be down from $5.6 billion.
The company also slashed its chip shipment forecast for the June quarter by 50 million units, to between 150 million and 170 million. The lower end of the range would represent a drop of nearly 25 per cent from 199 million units shipped in fiscal Q3 2018.
Still, Qualcomm president Cristiano Amon insisted the company feels it is in a “very strong” position to capitalise on the shift to 5G, citing more than 75 design wins with vendors.
He added impacts from 5G are expected to become “very material” in the company’s fiscal 2020.Subscribe to our daily newsletter Back