Qualcomm Inc on Wednesday forecast current-quarter revenue largely in line with expectations as it signed more contracts for 5G phones, which use higher-priced chips, at a time when the COVID-19 pandemic has disrupted production channels and led to a fall in demand for smartphones.
), who have either withdrawn or cut their revenue forecasts, citing the impact of the virus on demand and supply channels.
Qualcomm, the world’s biggest supplier of modem chips that connect mobile phones and other devices to data networks, said coronavirus reduced demand for handsets by about 21% in the second quarter from a year earlier, and forecast 30% reduction in handset shipment in the current quarter. Fall in device sales means less profit and revenue for Qualcomm, as it makes most of its profit from licensing its technologies that allow phones to connect to wireless data networks.
The company, however, sold chips at an average price of $31.8 compared with their earlier price of $23 - a sign that it is benefiting from a rise in demand for high-end chips. Qualcomm’s second-quarter revenue from its licensing business stood at $1.07 billion, above estimates of $1.01 billion, according to FactSet.
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