Qualcomm predicting 30 percent drop in phone shipments due to COVID-19

The company's net income dropped 29 percent year-over-year

Qualcomm is predicting that smartphone shipments are going to decrease by 30 percent over the next few months due to the COVID-19 pandemic.

Although the harder company beat its revenue expectations with $5.2 billion USD (about $7.2 billion CAD) in revenue, its net income dropped 29 percent year-over-year.

Qualcomm has outlined three different factors related to the virus that could affect sales this year. Firstly, it notes that consumer and business confidence could be impacted by government policies that try to limit the spread of COVID-19.

Next, it recognizes that its sales depend on the demand for smartphones that include its products. Lastly, Qualcomm notes that the global wireless supply chain and workforces could impact its sales.

However, COVID-19 is not the only factor that could impact the company’s sales this year, as Qualcomm says that there are other issues that it is facing. For instance, it is in a licensing dispute with Huawei and is dependent on “a small number of customers and licensees.”

Even though Qualcomm expects to see a drop in device shipments, it is still citing its original prediction for the number of 5G devices that will be sold in 2020. The company expects that there will be between 175 million and 225 million 5G phone shipments.

Qualcomm is expecting to see a boost in shipments this year because of the move to 5G since it is a key supplier of the modems that support the next generation of wireless technology.

The company has also stated that it believes phone launches for this year are on track for the most part.

Source: Qualcomm, The Verge