Qualcomm cuts forecast as demand slows

Qualcomm, the biggest supplier of wireless chips for mobile phones, cut its estimates for the remainder of the year as handset makers seek to leverage their resources.

Paul Jacobs, Qualcomm's CEO, said in a Financial Times interview that he had seen a very sharp decline over the past two weeks in inventories of Qualcomm chips held by customers.

He added, however, "They are trying to manage their working capital more carefully. There's clearly some lessening of demand, but not as dramatic as you might think." Qualcomm is still predicting 25% growth for its CDMA wireless technology during 2009.

Qualcomm reduced its forecast for the December quarter to US$2.3billion to US$2.5 billion and for earnings per share to 46-50 cents. Analysts expected revenues of US$2.9 billion and earnings of 61 cents per share, said Reuters Estimates.

Jacobs also told the Financial Times that the company was putting aside $200m in its budget for next year to defend itself from legal challenges over patent licensing, principally from its wireless rival Broadcom.