Qualcomm Bolsters 5G Outlook on Silicon Demand
Qualcomm CEO Steve Mollenkopf says 5G represents the single biggest opportunity in Qualcomm’s history. And to that end, the 34-year-old company already appears to have some wind in its sails.
Revenues were down 17% year over year during the company’s fiscal year fourth quarter, but it beat Wall Street’s expectations and sent company stock up 7%. Qualcomm banked $506 million in net income on $4.81 billion in revenue during the quarter.
The company is hinging its future performance on 5G, and highlighted areas of momentum that it expects to fuel growth. CEO Steve Mollenkopf told analysts that the company is actively working with standards bodies to define forthcoming advancements in 5G and positioning itself to support the expansion of 5G into enterprise, industrial IoT, and automotive markets.
“The complexity and expansion of cellular technologies beyond the smartphone into nearly every industry play directly to Qualcomm’s strengths and are why we believe 5G will represent the single biggest opportunity in Qualcomm’s history,” he said during an earnings call, according to a Seeking Alpha transcript.
“There are now 40 [original equipment manufacturers] and over 30 operators launching or announcing 5G products or commercial service, up from approximately 20 OEMs and operators respectively at the start of the year,” Mollenkopf said.
“We expect 5G to launch in all regions within the next two years to three years,” he said. “We further estimate by the end of 2020, 5G base station deployments will increase to approximately 1 million which, to put in context, is 10 times the scale of the entire network of a large U.S. operator.”
Akash Palkhiwala, who was formally appointed as EVP and CFO prior to the earnings release, said the company estimates 175 million to 225 million 5G devices to ship in 2020. Qualcomm anticipates a rise in revenue as 5G handsets proliferate because the majority of devices to date are shipping with Qualcomm’s Snapdragon silicon. The company also holds important patents that manufacturers need to license for 5G.
