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On August 1st, Qualcomm gave a less optimistic forecast for its fourth-quarter, which was lower than Wall Street analysts expected. Affected by this news, Qualcomm shares fell 6%.
Qualcomm said that due to Sino-US trade disputes, its business was affected by the “OEM share turned to Huawei”; in addition, due to the US trade ban on Huawei, Qualcomm lost its direct sales to Huawei to a lesser extent. According to Reuters, some Chinese mobile phone manufacturers are now buying 5G baseband chips from Huawei.
Maribel Lopez, principal analyst at market research firm Lopez Research, said she believes that some Chinese handset makers are using Huawei's 5G modem chipset because they fear that trade frictions or Qualcomm's legal issues will prevent Qualcomm from licensing its technology, rather than Any patriotic performance of these Chinese mobile phone manufacturers.
Qualcomm pointed out that Huawei's 5G modem is at least 50% larger than its first-generation 5G chipset.
Qualcomm also said that China has launched 5G in June, and people are full of confidence in the 5G transformation. We have let some original equipment manufacturers (OEMs) cancel some 4G releases and transfer the product portfolio to 5G design. This can also explain why the speed of product launches of Chinese mobile phone manufacturers has slowed down noticeably. According to the previous style, the corresponding category of mobile phone products has already come out, and now everyone is rushing to prepare 5G mobile phones.
Qualcomm CEO Steven Mollenkopf told analysts on the conference call: "Huawei's export ban, and the acceleration of the 4G to 5G migration in the past few months, has contributed to the industry's situation - especially In China, we expect this to create significant resistance to the next two quarters."
In an interview with Reuters, Steven Mollenkopf said that Huawei's new market share is mainly from domestic competitors such as Xiaomi, Oppo and Vivo, all of which are major customers of Qualcomm.
He said: "Huawei is very active in expanding its market share because they cannot sell products internationally."
In addition, Qualcomm said that due to the US trade ban on Huawei, Qualcomm lost its direct sales to Huawei to a lesser extent.
According to FactSet, in the third quarter, Qualcomm's modem chip shipments fell 22% to 156 million, lower than the 160.1 million that Wall Street analysts had previously expected.