Qualcomm President and CEO Cristiano Amon kicked off the company’s second-quarterly conference call on Wednesday with a nod to its just announced deal with Samsung Electronics.
The two companies agreed to extend their patent license agreement for 3G, 4G, 5G and upcoming 6G mobile technology through the end of 2030.
The deal validates Qualcomm’s Snapdragon platform for premium Android experiences, he said, noting that Samsung is the largest smartphone supplier by unit volume. The agreement covers Qualcomm chips in smartphones, PCs, tablets, extended reality and more.
“The extension of our licensing agreement is further evidence of our mutual commitment to long-term collaboration,” Amon said in a statement. “Our relationship with Samsung has never been stronger. For more than two decades we’ve worked together to lead the industry and we are pleased to continue this strategic partnership to develop innovative technologies and products using Snapdragon platforms to power more Samsung premium devices globally.”
Qualcomm’s expanded relationship with Samsung will help replace any losses it experiences with Apple, Amon told The Wall Street Journal. Apple, which reports earnings later today, is expected, at some point, to switch to its own 5G modems for iPhones, replacing Qualcomm Snapdragon chips.
Handset forecast lowered
Shares in Qualcomm were down more than 3% this morning after Qualcomm lowered its handset forecast, citing macroeconomic conditions.
CFO Akash Palkhiwala said the company expects global handset demand to decrease this year, to shipments of 650 million to 700 million 5G devices, which is down from the earlier forecast of over 750 million units. He cited uncertainly in the global economy and the impact of Covid measures in China as reasons for customers acting with caution in the second half of 2022.
Otherwise, there was a lot of upside to Qualcomm’s quarterly results. Handset revenues of $6.1 billion increased 59% year over year driven by demand in high-end phones. IoT revenues were up 31%, to $1.8 billion, and automotive revenues were $350 million with year-over-year growth of 38%.
Amon said one thing they’re very focused on is bringing RF front-end to auto IoT and Wi-Fi. The RF front-end design win pipeline is now in excess of $900 million in automotive.
“We also see opportunity with Wi-Fi,” he said. “We announced our next-generation Wi-Fi and Bluetooth for RF front-end modules to go over chips as well. So we expect to be focusing on driving growth in auto and IoT."