Amid the many shaky earnings reports that have released in recent days, Qualcomm is doubling down on sharing details on its 5G rollout progress as assurance that the company is doing well.
Even with continuous shakeups, Qualcomm believes its business is solid, with its 5G expansion progressing faster than it expected. The company stated in its recent earnings call that Verizon expects up to three-quarters of its 2020 smartphones will be 5G compatible, while AT&T is aiming to have its 5G coverage solidly established nationwide by this time next year. News of progression in T-Mobile and Sprint’s merger is also expected to propel the nation-wide 5G rollout. The carriers already offer such Qualcomm-powered 5G devices as the Samsung Galaxy S10 5G, among many others.
Qualcomm slumps may build momentum with 5G
The chipmaker reported its stocks at $0.80 per share for the end of the third quarter when projections expected $0.75 per share. However, Qualcomm’s stocks were $1.01 during the third quarter of 2018. The company’s revenue came in at $4.89 billion; below its $5.08 billion expectations.
Still, Raymond James analyst Chris Caso told Marketwatch that Qualcomm will likely fare well in the long run due to its 5G development and that a turn around in its figures is inevitable. The manufacturer has no choice but to soldier on amid the rapid and continuous technological advancements.
How Qualcomm has struggled in 2019
The year has been tumultuous for Qualcomm with several partnering companies facing trading issues and reevaluating their own strategies that involve components made by the semiconductor manufacturer. Qualcomm was among the companies that distanced themselves from Huawei amid the U.S. government’s product ban. Though Huawei has its own Kirin brand chipsets, the manufacturer largely relied on Qualcomm to provide Snapdragon chipsets for its devices sold outside of China.
Many have focused on how Huawei is faring with its ties to with U.S. companies uncertain, but Qualcomm’s share and revenue dips are a decent indication that the Chinese manufacturer is not one-sided in benefits from collaborating with the U.S. The government has since eased some of the restrictions against Huawei, but the security-based ban remains very much in place. Still, pundits expect Qualcomm to benefit from 5G licensing with Huawei in the future.
5G collaboration twists and turns continue
Meanwhile, Qualcomm and Apple have established a deal to collaborate on building 5G modems for upcoming iPhones. Apple originally backed away from working with Qualcomm with the intention of creating its own 5G modems but the companies have come to an agreement that would allow Apple to fast track its 5G iPhone production to 2020.
There is currently no word on how Apple’s recent purchase of Intel’s modem division will affect its deal with Qualcomm long term, but the companies are already on track for continued collaboration for the next six years.
Pundits have noted that the $4.7 billion ($3.23 per share) one-time payment Qualcomm received from Apple as part of its licensing deal was not included in the publicly shared earnings report because it was apart of a legal settlement and not Qualcomm’s business earnings.
Qualcomm also remains cautious about the future
Qualcomm has noted its expectations for the fourth-quarter are soft as real shifts toward 5G are made across the market and not just for first place grabs. The company is certain that its business will ramp up in 2020 when the new wireless technology is even more established.
