Thanks to COVID-19, Qualcomm predicts 30% decrease in phone shipments

Qualcomm generic logo
Qualcomm generic logo (Image credit: Harish Jonnalagadda / Android Central)

What you need to know

  • Qualcomm shared its latest earnings report on April 29, 2020.
  • The report cites a 21% decline in demand for phones for the first three months of 2020.
  • A 30% decrease in phone shipments is expected for May-June.

On April 29, 2020, Qualcomm published its Q2 Fiscal 2020 earnings report that spans January through March of this year. Being the world's largest supplier of chipsets for mobile devices, Qualcomm's performance tells a lot about the mobile tech world in general.

Taking a look at the report, there are a couple of numbers that really stand out. For the timeframe between January and March 2020, Qualcomm notes that there was a 21% decline in phone shipments compared to year-over-year performance. Furthermore, the report says:

Our GAAP results were also negatively impacted by $265 million, or $0.21 per share, in non-marketable investment impairments, resulting in part from the impacts of COVID-19.

Looking ahead for what business will be like in May - June, Qualcomm is expecting an even bigger drop in phone shipments from its partners — as much as 30%.

Given the uncertainty caused by the COVID-19 pandemic, including the timing and pace of economic recovery, our guidance for the third quarter of fiscal 2020 is based on a planning assumption that there will be an approximate 30% reduction in handset shipments relative to our prior expectations, resulting in an estimated impact of greater than ($0.30) to EPS in the third quarter of fiscal 2020.

Despite all of this, Qualcomm is still expecting to ship a lot of its own modems to companies like Samsung, Apple, and others. Qualcomm sold 129 million modems during its fiscal Q2, and for Q3, the company anticipates it'll ship at least 125 million or as much as 145 million.

Looking at other notable numbers in the report, Qualcomm saw total revenues of $5.2 billion, which is a 5% increase compared to the $4.9 billion earned this time last year.

Qualcomm still made money this past quarter, but it's obvious that rough times are ahead for it and the overall mobile tech space. Qualcomm was predicting that there would be up to 1.85 billion device shipments in 2020, but now the company has taken that back and isn't predicting a total shipment estimate for the year.

As noted in the company's report, COVID-19 is obviously playing a role in these numbers. Just how much of an impact it'll continue to have is difficult to pinpoint for sure, with Qualcomm noting that "the actual impact may differ materially due to the challenging economic environment and highly uncertain effects of COVID-19."

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Joe Maring

Joe Maring was a Senior Editor for Android Central between 2017 and 2021. You can reach him on Twitter at @JoeMaring1.