Qualcomm cuts outlook for 2015 due to lost chip business

by: Bogdan PetrovanApril 23, 2015
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qualcomm logo mwc 2015 1

Qualcomm announced its results for Q2 of fiscal year 2015, and while chip shipments increased in the period, the outlook for the entire  year isn’t as good as Qualcomm initially hoped.

Qualcomm posted $6.9 billion in revenue (GAAP) for Q2 FY2015 (the quarter ending March 29), an 8% increase over the same quarter a year ago and a 3% decrease compared Q1 FY2015. However, operating income and net income both plummeted compared to the same periods due to two major expenses that Qualcomm incurred in Q2: a $975 million charge for resolving an anti-trust investigation in China and a $950 million payment for securing advanced manufacturing capacity at a supplier (TSMC or possibly Samsung, which is reportedly going to manufacture Qualcomm’s upcoming Snapdragon 820).

qualcomm q2 fy2015

Qualcomm shipped 233 million chips in Q2 FY 2015, a 24% increase year over year. The bulk of Qualcomm’s revenues, however, comes from the licensing of its technologies to various partners; the company estimates its licensees shipped 384-388 million devices at an average selling price of $193-$199.

[quote qtext=”While we remain confident in the significant growth opportunities ahead, we are reducing our QCT outlook for fiscal 2015, primarily due to the increased impact of customer share shifts within the premium tier and a decline in our share at a large customer. In addition to our ongoing expense management initiatives, we have initiated a comprehensive review of our cost structure to identify opportunities to improve operating margins while at the same time extending our technology and product leadership positions” qperson=”Steve Mollenkopf, Qualcomm CEO” qsource=”” qposition=”center”]

For the full year, Qualcomm now expects revenue of $25-27 billion, down from the previous estimate of $26.3-28 billion. The chipmaker said the decrease is due to “a decline in [its] share at a large customer,” which is clearly a reference to Samsung, who snubbed Snapdragon 810 for the Galaxy S6 in favor of its own chip. Another reason for the dimmed outlook is the growing market share of manufacturers that don’t use Qualcomm SoCs (read Apple and Samsung).

  • Jordan Ross

    Qualcomm was caught flat footed in 2013/2014 and are now paying for it. Nobody snubbed them, they shot themselves in the foot. The 810 is a huge joke and Samsung went with a better option, hopefully the 820 is way better.

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  • Magnus100

    It would be awesome if they could get the Snapdragon 820 right and ready for the Note 4, but unfortunately that appears unlikely .

  • flye

    It’s good, at least now they have another competitor (exynos).

    Don’t have to rely on Apple.