Lower Smartphone Sales Hit Qualcomm's Revenue

During the first fiscal quarter of 2023, Qualcomm revealed a drop in earnings. Company president and CEO Cristiano Amon warned that declines in revenue from devices would continue.

Net income fell 34% to $2.2 billion on revenue of $9.5 billion, down 12%. Revenue at its QCT segment, which includes chips for smartphones, automotive, and IoT devices along with RF front-end components, decreased by 11% to $7.9 billion. Within this, mobile handset sales of $5.8 billion were down 18% and IoT revenue grew 7% to $1.6 billion. QTL revenue of $1.5 billion was down 16%.

Amon noted Qualcomm was implementing further spending reductions and streamlining operations due to macroeconomic factors and an overall weakening in demand. “As the handset industry continues to experience reduced demand we are now expecting elevated channel inventory levels to persist at least to the first half of calendar 2023,“ he stated. Amon added the same trends are evident in the IoT sector, though also noted this field was poised to become the company’s largest addressable market.

The CEO highlighted Samsung’s decision to use Qualcomm’s Snapdragon 8 Gen 2 chipset in its newest Galaxy 23 smartphones. He also stated the company would see significant momentum in India for its fixed wireless access portfolio. Amon claimed the company’s strategy was working and it remained focused on expanding its addressable market to approximately $700 billion over the next decade.