Qualcomm offered $5.2 billion to $6 billion revenue guidance and it managed to make $6 billion. Non-GAAP diluted EPS was projected at $0.90 – $1.00 and Qualcomm actually managed to make $1.16.
The MSM chip shipments was guided at 175 million to 195 million while the company actually sold 201 million of these chips.
Total reported device sales was expected to be between $52 billion and $60 billion and in reality Qualcomm scored $62.6 billion. Qualcomm shipped between 321 million to 325 million 3G/4G devices and estimated reported 3G/4G device average selling price was at $191 – $197.
The guidance for Q4 is also positive with revenues estimated between $5.4 billion to $6.2 billion, MSM shipments 195 million to 215 million, Non-GAAP diluted EPS $1.05 - $1.15 and total reported device sales between $57 billion and $65 billion.
There are a few reasons for such good results, the first being Samsung. The company chose Snapdragon 820 for some markets with its flagship phones. The Snapdragon 820 ended up in 115 devices and it looks like one of the strongest high end phone chips in a while.
The introduction of the Snapdragon 821 will rekindle the fire and will make some additional sales for Samsung Galaxy Note 7 and a few other high end phones including some phones from LG and others. The 4G modem business is in good shape but one has to be careful as Qualcomm might lose some of the iPhone business to Intel. Everyone wants carrier aggregation capable modems these days, that is Cat 6 and up and Qualcomm offers this from Snapdragon 430 to the Snapdragon 820.
It is interesting to notice that while Apple iPhone sales were down, Qualcomm did better mainly as when Apple declines at the high end, Qualcomm can make money from its high end Snapdragon chips.
We expect to see the announcement of Snapdragon 830 before the end of the year while devices shipping with the new chip in late Q1 2017 or early Q2 2017. As far as we know this might be the 10nm SoC but we will have to wait and see.
Qualcomm is investing heavily in improvements of 4G, current and future generations as well as a concentrated focus on 5G. From where we stand, Qualcomm still has the best chances to dominate the 5G market, especially due to the fact that 5G is an evolution of 4G with some new wave length and concepts added to it.
Last year’s loss of Samsung Galaxy S6 design win hurt a lot, and now the big customer is back, it seems that investing in a custom ARM Kryo core and dominating in Adreno graphics paid off.