Qualcomm shares slide over 7% in afterhours as smartphone weakness clouds growth push

What happened

Qualcomm fell short of Wall Street estimates for fourth-quarter smartphone chip sales amid sluggish demand and declining Apple-related revenue. Its handset-unit revenue fell 26% to $5.14 billion, pulling chip-segment revenue down 8% to $9.02 billion. A better-than-expected data-centre revenue forecast did not offset investor focus on its core business decline.

Confirmed

Global impact / market context

Smartphone chips are Qualcomm’s core business, so weaker device demand and falling Apple-related sales directly reduce revenue from an important source. If handset sales remain soft, that could limit growth and make the newer data-centre business more important in offsetting weakness, though its forecast did not reassure investors here.

Analyst inference

Global smartphone shipments fell 20% in the September quarter to a 14-year low, while rising memory-chip costs pushed device prices higher. Qualcomm’s handset revenue fell 26%, and investors were also concerned that Apple would use its own modem chips, which connect phones to mobile networks.

Confirmed

What to watch

1. Watch whether Qualcomm’s next handset results show the sequential Android sales growth CEO Cristiano Amon described, and whether that lifts revenue from its smartphone chip business. Analyst inference
2. Track Qualcomm’s reported sales to Apple and any further details about the iPhone maker’s shift to its own modem chips, which connect phones to mobile networks. Analyst inference
3. Compare data-centre revenue with the forecast and handset performance in future updates; the article says the data-centre forecast beat expectations but did not enthuse investors. Confirmed

Evidence

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