Sign up USA
Proactive Investors - Run By Investors For Investors

Qualcomm hit by Apple rumors ahead of earnings update on Wednesday

Qualcomm is embroiled in a spat with the largest company in the world and has a history of falling foul of regulators in China, South Korea and Taiwan.
iPad user
It is thought that Apple may not use Qualcomm's modem chips in the new iPad

The bears had their teeth into Qualcomm Inc (NASDAQ:QCOM) on Tuesday as rumors emerged Apple Inc (NASDAQ:AAPL) is dropping it as a components supplier.

The rumors are plausible as the two companies are in dispute over alleged unpaid royalties after Apple sued the chip-maker in January, accusing it of overcharging for chips and holding back around US$1bn in promised rebates.

READ Qualcomm sues Apple device makers for unpaid royalties

The Wall Street Journal (WSJ) reports that Apple is designing iPhones and iPads for release next year that will not feature Qualcomm’s components; Qualcomm chips have long been used in the electronic devices maker’s flagship products.

The WSJ;s sources claim Qualcomm has withheld software that is critical to testing Qualcomm chips in iPhone and iPad prototypes.

Qualcomm told the Reuters news agency it is providing fully-tested chips to Apple.

“We are committed to supporting Apple’s new devices consistent with our support of all others in the industry,” Qualcomm said.

It told a similar story to Bloomberg News.

“The Qualcomm modem that could be used in the next generation iPhone has already been fully tested and released to Apple,” it claimed.

The chip-maker is set to release its fiscal fourth quarter results on Wednesday, and the conference call with the analysts could prove to be sparky.

The company’s chips are still used in other smartphones, such as Google’s flagship Pixel phone, and the company has been making a big push into virtual/augmented reality and the Internet of Things.

Analysts are expecting Qualcomm to report earnings per share of 81 cents, down from US$1.28 a year earlier.

The top-line is tipped to decline by 6% to US$5.8bn, and if that forecast is on the money then it would represent the third successive quarter of revenue decline.

The company’s own revenue guidance range spans from US$5.4bn to US$6.2bn, while it expects underlying earnings per share to fall between 75 and 85 cents.

Analysts will also be looking for news on the proposed acquisition of Dutch automotive chip-maker NXP Semiconductors NV. Announced almost a year ago, the deal still has not completed, and NXP shares are currently trading almost US$7 above Qualcomm’s offer price.

Shares in Qualcomm were down 6.68% at US$51.01 towards the end of the afternoon trading session..

View full QCOM profile View Profile


Related Articles

picture of fibre optic cables
November 14 2017
Widening the customer base and taking out duplicated costs has been the strategy

No investment advice

The Company is a publisher. You understand and agree that no content published on the Site constitutes a recommendation that any particular security, portfolio of securities, transaction, or investment strategy is suitable or advisable for any specific person. You understand that the Company receives either monetary or securities compensation for our services. We stand to benefit from any volume this write-up may generate.

You further understand that none of the information providers or their affiliates will advise you personally concerning the nature, potential, advisability, value or suitability of any particular security, portfolio of securities, transaction, investment strategy, or other matter.

You understand that the Site may contain opinions from time to time with regard to securities mentioned in other products, including company related products, and that those opinions may be different from those obtained by using another product related to the Company. You understand and agree that contributors may write about securities in which they or their firms have a position, and that they may trade such securities for their own account. In cases where the position is held at the time of publication and such position is known to the Company, appropriate disclosure is made. However, you understand and agree that at the time of any transaction that you make, one or more contributors may have a position in the securities written about. You understand that price and other data is supplied by sources believed to be reliable, that the calculations herein are made using such data, and that neither such data nor such calculations are guaranteed by these sources, the Company, the information providers or any other person or entity, and may not be complete or accurate.

From time to time, reference may be made in our marketing materials to prior articles and opinions we have published. These references may be selective, may reference only a portion of an article or recommendation, and are likely not to be current. As markets change continuously, previously published information and data may not be current and should not be relied upon.

Copyright ©, 2018. All Rights Reserved - Proactive Investors North America Inc., Proactive Investors LLC

Market Indices, Commodities and Regulatory News Headlines copyright © Morningstar. Data delayed 15 minutes unless otherwise indicated. Terms of use