Intel intends to cut the losses in its mobile chipset business next year, but will still likely lose billions of dollars in the mobility market in 2015. However, top company executives have said that the losses have been necessary to get the silicon giant into mobile after years of passivity.
Qualcomm executives noted that the company continues to face hurdles in China, and partially as a result the firm said it is now expecting a slightly more conservative growth rate during the next five years. However, the chipset giant still thinks it has plenty of room to grow thanks to increasing LTE and smartphone adoption and its decision to move into new areas, such as supplying silicon for servers.
Intel is going to merge its chipset unit targeting smartphones and tablets with it PC chip unit, arguing that the distinction is blurring between different computing models.
Qualcomm warned that its 2015 sales and profit could be hurt by the outcome of an anti-monopoly investigation into the company's licensing practices in China, the world's largest smartphone market. The chipset giant also disclosed that it is facing probes from the Federal Trade Commission and European Commission.
Chipset giant Intel reported just $1 million in revenue in its mobile and wireless business in the third quarter, thanks in large part to the subsidies it is paying tablet makers to include its silicon in their products. However, Intel executives indicated better days are ahead for the mobile business as the company works to move into lower-cost smartphones starting later this year. Meanwhile, Intel announced a deal with AT&T Mobility and Asustek for AT&T to launch an Intel-powered smartphone.
Qualcomm said it agreed to buy British Bluetooth chipset specialist CSR for £1.56 billion ($2.49 billion), giving it a leg up in the connect car and Internet of Things markets, which are set to grow substantially.
Samsung Electronics forecasted that its operating profit in the third quarter fell by as much as 60 percent year-over-year amid stagnating smartphone sales. However, the company is hopeful that sales will pick up in the fourth quarter and said it is readying new phones in the low-to-midrange market to help it recover ground.
Samsung Electronics paid Microsoft $1 billion last year to use Microsoft's technology in its mobile devices as part of a patent-licensing agreement, according to court documents filed by Microsoft. As part of a lawsuit Microsoft initiated against Samsung, Microsoft is claiming Samsung owes it $6.9 million in unpaid interest from last year.
Even though Broadcom is exiting the cellular baseband market, CEO Scott McGregor thinks the company will have a secure place in high-end smartphones thanks to its Wi-Fi chipsets.
The smartphone revolution has greatly expanded the size of the handset market with global revenues doubling in the last six years, as consumers substitute more expensive smartphones for their feature phones and basic phones. Yet changes have devastated most of the leading incumbent handset vendors.