Qualcomm expects "broadening demand weakness" for mobiles

Qualcomm believes the world will not buy many Qualcomm mobiles in the first half of 2023. In today's Q1 2023 earnings call, the company says it sees a "growing weakness in demand among phones and IoT products" and expects its customers won't bother shipping as many phones in their second and third quarters tax (until June 2023).

Qualcomm already saw an 18 per cent drop in phone sales in the last quarter (which ended Dec. 25), with research firm IDC calling it the "biggest single-quarter decline" for phones overall. , not just on Qualcomm-powered phones.

Next quarter, Qualcomm doesn't actually expect its phone sales to drop that much; Of course, they'll decline seasonally, as more people buy electronics during the holiday quarter than any other period, but Qualcomm believes they'll hold steady year-over-year. The company believes things "might normalize in the second half of the calendar year."

This isn't great news for Samsung, which has just announced its Galaxy S23 lineup, which includes a special chip from Qualcomm. Apple announced its new mobiles in the fall, but they use Apple's processors and are trying to move to their own radios instead of Qualcomm's. However, they will reportedly continue to use Qualcomm modems until 2023.

Qualcomm doesn't think other phone makers will be slow to announce or ship their new phones, saying OEMs still appear to be on the way. There will be "channel inventory reduction," where companies produce and ship less of them, so they don't have to cut prices and potentially suffer losses. Other chip makers like AMD are making similar cuts as PCs also saw the biggest drop in demand. AMD, however, thinks its own PC slump could end after another rough quarter.