Qualcomm predicts ‘broadening demand weakness’ for phones

Qualcomm thinks the world gained’t be shopping for very many Qualcomm phones within the first half of this 12 months. On right this moment’s Q1 2023 earnings name, the corporate says it sees “broadening demand weakness among handsets and IoT products” and expects its prospects merely gained’t trouble transport as many phones in its second and third fiscal quarters (via June 2023) as a result of they don’t count on folks to purchase them.

Next quarter, Qualcomm really doesn’t count on its telephone gross sales to say no all that a lot; they’ll be down seasonally, in fact, since extra folks have a tendency to purchase electronics in the course of the vacation quarter than some other interval, however the firm thinks they’ll be flat 12 months over 12 months. The firm thinks issues “might normalize in the second half of the calendar year.”

This is just not nice information for Samsung, which simply introduced its Galaxy S23 lineup, together with a particular Qualcomm chip. Apple broadcasts its new phones within the fall, however these use Apple’s personal processors and try to maneuver to their very own radios as an alternative of utilizing Qualcomm ones. They’ll reportedly nonetheless use Qualcomm modems via 2023, although.

Qualcomm doesn’t suppose different telephone producers will delay saying or transport their new phones, saying the OEMs nonetheless seem like on monitor. There will merely be a “drawdown of channel inventory,” the place firms produce and ship fewer of them in order that they don’t have to cut back costs and probably take a loss. Other chipmakers like AMD are doing related drawdowns since PCs additionally simply had the largest-ever drop in demand. AMD, nevertheless, thinks its personal PC hunch would possibly finish after another tough quarter.