Wall Street sees little respite to Qualcomm's smartphone gloom | Tech News

Wall Street sees little respite to Qualcomm's smartphone gloom

At least 14 brokerages lowered their price targets on the largest maker of smartphone chips on Thursday.

By:REUTERS
| Updated on: Nov 04 2022, 10:00 IST
Qualcomm
Shares, which have already lost more than a third of their value so far in 2022, were down nearly 8% before the bell. (REUTERS)

Sales at Qualcomm Inc are slowing as the smartphone market heads for its worst contraction in years, and Wall Street analysts don't expect that to turn around anytime soon.

At least 14 brokerages lowered their price targets on the largest maker of smartphone chips on Thursday after it gave a forecast $2 billion below market estimates and said it had extra inventory that could take half a year to clear.

You may be interested in

MobilesTablets Laptops
Apple iPhone 15 Pro Max
  • Black Titanium
  • 8 GB RAM
  • 256 GB Storage
27% OFF
Samsung Galaxy S23 Ultra 5G
  • Green
  • 12 GB RAM
  • 256 GB Storage
Google Pixel 8 Pro
  • Obsidian
  • 12 GB RAM
  • 128 GB Storage
Apple iPhone 15 Plus
  • Black
  • 6 GB RAM
  • 128 GB Storage

Shares, which have already lost more than a third of their value so far in 2022, were down nearly 8% before the bell.

Also read
Looking for a smartphone? To check mobile finder click here.

"We believe a weak market, and even a potential inventory correction was likely not entirely unexpected, though the magnitude is probably worse than what some might have had in mind," analysts at Bernstein wrote in a note.

The company's dour holiday-quarter outlook underscores the rapid decline in the smartphone market, as strict COVID-19 restrictions sap demand in top market China and a global surge in inflation weighs on consumer spending elsewhere.

The chipmaker now expects a low-double-digit percentage decline in handset sales volumes this year, compared with its prior forecast for a mid-single-digit percentage drop.

"Qualcomm's smartphone business is more positioned in the mid-range ... and the mid-range is currently the most impacted segment in the smartphone market," said Canalys research analyst Runar Bjorhovd.

"The outlook for the remainder of the year remains pessimistic, but there are hope that demand will start to pick up again towards the middle of 2023," Bjørhovd added.

There are, however, some bright spots.

Qualcomm expects to have the vast majority of 5G modem share for the 2023 iPhone launch, up from a previous assumption of 20%. Its revenue from new focus areas such as automotive equipment, networking and computers is also rising.

 

Catch all the Latest Tech News, Mobile News, Laptop News, Gaming news, Wearables News , How To News, also keep up with us on Whatsapp channel,Twitter, Facebook, Google News, and Instagram. For our latest videos, subscribe to our YouTube channel.

First Published Date: 04 Nov, 10:00 IST
NEXT ARTICLE BEGINS