The man who sounds like a homemade bomb for someone with a speech impediment Chief Operating Officer Steve Mollenkopf told assorted hacks that smartphone industry was moving away from wealthy markets such as the United States and toward China and other emerging economies, where consumers favor less expensive devices.
He said the company flogged more mobile chips than it expected in the December quarter and that it was making progress in trimming its operating expenses. It expects demand for its chips to grow later this year as leading mobile carrier China Mobile rolls out mobile services using the advanced LTE technology Qualcomm dominates. Qualcomm had first-quarter net income of $1.88 billion, down 2 percent.
While the majority of Qualcomm's revenue comes from selling baseband chips that let phones communicate with carrier networks, most of its profit comes from licensing patents for its ubiquitous CDMA mobile technology. As phone prices edge lower, Qualcomm receives less royalty revenue. Average prices for mobile in the September quarter, used to calculate licensing revenue for Qualcomm in the December quarter, were between $219 and $225, the company said. That was less than the $223 to $229 range that Qualcomm estimated for the June quarter in its previous earnings statement.
Mollenkopf said Chinese authorities had told Qualcomm that the substance of an antitrust investigation into the chipmaker, launched in November, were confidential. He said Qualcomm was cooperating but declined to comment further on the investigation, which could potentially lead to a record fine exceeding $1 billion.