As expected, Qualcomm (NASDAQ:QCOM) revenues for the latest quarter plummeted from the year-ago period, and the company said it doesn't expect great things from the current quarter given the slowdown in the worldwide smartphone market.
But the San Diego-based chip vendor is betting heavily that its Snapdragon 820 SoC can help turn things around in mobile devices later this year. And it's churning out a variety of other processors to tap the Internet of Things.
Qualcomm posted $5.78 billion in revenue during the recent quarter, which actually beat analysts' expectations of $5.68 billion but was down 19 percent year-over-year. Net income was $1.5 billion, down 24 percent from the previous year, and the company projected revenue for the current quarter to come in at $4.9 billion to $5.7 billion, far below expectations.
Like many vendors of smartphones and components, Qualcomm is feeling the pinch of slowing growth in the market as smartphone penetration rates top out in crucial regions such as China, Western Europe and the U.S. Too boost its revenues, it's marketing several new processors as key components for IoT devices and platforms, powering everything from connected cars to smart homes.
At CES the company unveiled the Snapdragon 602A, which is designed for connected cars and will be commercially available in 2017 Audi models. It also announced "a smart home-reference platform" using its Snapdragon 212, the first commercial drone based on its Snapdragon Flight platform, and a Snapdragon-based LTE modem for IoT uses.
To get its mojo back in mobile, though, the company is pinning its hopes on the Snapdragon 820, which it introduced at CES earlier this month and is scheduled to go into production next quarter.
"We now have more than 100 design wins based on the 820, and the product is entering mass production using 14-nanometer LPP technology," CEO Steve Mollenkopf said during the earnings call, according to a transcript from Seeking Alpha, adding that "many" product announcements regarding the 820 are slated for the Mobile World Congress trade show next month in Barcelona, Spain.
Some of those devices are likely to be high-end, flagship handsets that leverage the processor to deliver 4K video and other data-rich applications. Some models of Samsung's Galaxy S7 will reportedly include the chip.
Success with the 820, alongside more licensing wins and the company's recent budget cuts, could pave the way for a bright second half of 2016 after a tough 2015, Mollenkopf said in prepared remarks: "We signed several new license agreements in China and are on track with our cost reduction initiatives. Design traction for our new Snapdragon 820 processor continues to be strong, and we expect improving trends in our chipset business in the second half of fiscal 2016."
- see this Qualcomm press release (PDF)
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