Although Qualcomm’s first quarter results have exceeded analysts’ expectations, if Apple were to switch is chip for modem to Intel, its bottom line could be affected.
In a development that has helped bolster its sales for the quarter, Qualcomm has shipped more Snapdragon chips than it expected. It has reportedly beaten its sales estimate of by more than 6 million by shopping 201 million high-end chips. As a result of this, its sales have surged up by 3.6% from their previous year figures.
Incidentally, Samsung has also reported an excellent first quarter and has sold 15 million Galaxy S7 / S7 Edge smartphones. Although Samsung manufactures the Qualcomm Snapdragon 820 chips and does not depend on Qualcomm for them.
Interestingly, although Qualcomm’s revenues saw a bump of just 3.6%, its net income surged by 22% over the last quarter’s figure and stood at $1.44 billion. This has been attributed to increased sales of more profitable high-end chips.
Another reason for its jump in income is its licensing deals which it struck with Chinese companies including, Xiaomi and ZTE. Its licensees have sold devices worth $62.6 billion.
Although its skies look sunny, there are possibilities of the formation of dark clouds, since it is to be seen how the market will react to the launch of the much leaked Samsung Galaxy Note 7, which will feature is latest Snapdragon 821 chip. The Galaxy Note 7 will be launched in U.S., Europe and other markets shortly. It is also very likely that this CPU will be sitting in the heart of the next Nexus phone.
For the iPhone 7 if Apple were to switch chips from Qualcomm to Intel for its modems, with Apple selling some 231 million phones, it could impact Qualcomm’s bottom line.