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Qualcomm to focus on China and low-end phones in 2014

Posted: , by Alan F.

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Qualcomm to focus on China and low-end phones in 2014
Qualcomm, the largest supplier of chips for smartphones, said on Thursday that increasing sales of low-priced handsets will slow down the company's top-line growth next year. For its fourth fiscal quarter, the silicon slinger reported $6.48 billion in sales which was up 33% from last year, and 4% over the prior quarter. Net profits came in at $1.5 billion, up 18% from last year, but down 5% from the third fiscal quarter.

While Qualcomm has been enjoying annual gains of 25% in revenue, for next year the company forecast growth of only 5% to 11% because of the stronger growth of lower priced handsets expected in 2014. In addition, with Chinese carriers beginning to turn on LTE service in the country, Qualcomm expects the region to be one of its more important markets next year. And as the company moves its focus from the U.S. and high-end phones to China and lower-end models, Qualcomm says that it will introduce newer chips a little less often in the future.

"We know you can't get the same royalty revenue off of a sub-$200 phone that you get off an iPhone or the Galaxy line. We're seeing evidence that the emerging-market impact is having pressure on revenue and earnings trends and it's forcing the company to react and cut its spending."-Cody Acree, analyst, Williams Financial

Interestingly, Qualcomm CEO Paul Jacobs said on Thursday that Qualcomm had been interested in purchasing some of BlackBerry's assets. But the recent decision by the Canadian based handset manufacturer to issue $1 billion in convertible bonds has put the kibosh on that plan, at least for now. "There were some assets that we were interested in and we were looking at, but obviously they got a new refinancing," Jacobs said. "We’re waiting to hear where they are headed."

"What we're trying to do is focus on the highest-growth opportunities. We are investing heavily in the low end of the market to get our cost structure into a better place."-Paul Jacobs, CEO, Qualcomm

source: Reuters

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posted on 07 Nov 2013, 13:17 1

2. Shatter (Posts: 1989; Member since: 29 May 2013)


And that's how intels dominance in mobile began.

posted on 07 Nov 2013, 13:55

6. woodshop20 (Posts: 459; Member since: 14 Sep 2013)


Intel needs to focus less on CPU performance and more on GPU. That has always been their weak point and one of the reasons why Clover Trail wasn't so successful.

AMD strangely has the opposite weakness, so it'll be interesting when they release mobile ARM processors next year.

posted on 07 Nov 2013, 13:42 1

3. woodshop20 (Posts: 459; Member since: 14 Sep 2013)


Good idea. The Chinese "budget" market is actually a very important one and their phones aren't half bad, as long as you keep to Huawei, ZTE, Xiaomi, Oppo etc.

posted on 07 Nov 2013, 13:45

5. CanYouSeeTheLight (Posts: 761; Member since: 05 Jul 2012)


Since they keep producing top notch SOCs im okay with it, but Qualcomm shouldn't let their guard down as the top SOC manufacturer and should produce something noticeably faster than the S800 for early next year. (HTC One (2?) and Galaxy S5 i'm looking at you guys.)

posted on 07 Nov 2013, 18:54 1

8. Jurdiales (Posts: 112; Member since: 10 Oct 2012)


They want a piece of a big cake owned by Mediatek, thats interesting...

posted on 07 Nov 2013, 19:17

9. Genersis (Posts: 178; Member since: 29 May 2013)


Hmm, Their processors are better, I guess they'll look into making them cheaper to encourage low end adoption.

posted on 08 Nov 2013, 11:15

10. taikucing (unregistered)


Good, I don't want to see mediatek CPUs anymore because they suck.

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