Qualcomm keeps expectations in check; reveals 5G push — report – Mobile World Live

Qualcomm keeps expectations in check; reveals 5G push — report

20 NOV 2014

Qualcomm CEO Steve Mollenkopf (pictured) warned investors that the company expects revenue over the next five years to slow as the mobile chipset vendor deals with a number of challenges.

Speaking at the company’s annual analyst day in New York, Mollenkopf said revenue is expected to grow between 8 and 10 per cent per year over the next five years. Earnings per share are predicted to increase at a faster rate than overall revenue.

Previously, the company consistently forecast double-digit revenue growth for the business in its five-year forecasts.

When reporting its full year results at the beginning of November, Qualcomm said first quarter revenue for the 2015 fiscal year will be between $6.6 billion and $7.2 billion, representing flat to 9 per cent growth.

The company is currently facing an antitrust probe in China, in which the National Development and Reform Commission (NDRC) is investigating the activities of its licencing arm. The NDRC said in February that Qualcomm was suspected of abusing its dominant position in the wireless chipset sector.

The US silicon giant has said it is cooperating with the NDRC around the investigation, and in August reportedly said it is willing to modify its pricing in China and put an end to the probe.

It also claims to have had trouble collecting royalty payments — which make up a significant portion of its income — from device makers based in the world’s largest smartphone market by volume.

Reuters quoted Mollenkopf as saying that the underlying licensing market is continuing to grow, but that the company isn’t currently participating “to the degree we would like to”. However, he said the company can continue to grow in the area once the issue in China has been resolved.

The company is also set for new regulatory probes in Europe and the US. In its annual report, Qualcomm said the EC notified it that an investigation is being conducted related to “the sale and/or marketing of our baseband chipsets, including alleged conditions relating to the provision by us of rebates and/or other financial incentives”.

And on 17 September, the US’ Federal Trade Commission told Qualcomm it is conducting an investigation, which “concerns primarily our licensing business, including potential breach of FRAND [fair, reasonable and non-discriminatory] commitments”.

5G push
Qualcomm also chose to use the event in New York to announce that it aims to “spearhead” the definition of 5G technology to support expanded connectivity needs in the future.

It said 5G will be “user centric to scale for billions of connected devices and will provide a unified platform for all spectrum deployments/business models”.

The company also plans to adapt its technology to develop processors for datacentres. Mollenkopf noted that the requirements of mobile semiconductors are becoming more relevant to how server chips need to be designed.

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Tim Ferguson

Tim joined Mobile World Live in August 2011 and works across all channels, with a particular focus on apps. He came to the GSMA with five years of tech journalism experience, having started his career as a reporter... More

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