Qualcomm is far from a struggling company, they develop chipsets for mobile devices and have been keeping up with the fast growing market. One way they have kept things up is by increasing spending in research and development of advanced technologies. Even with the increased spending, they have reported record high numbers for the 3rd Quarter of the Fiscal year 2014.
Qualcomm has long been the number one provider of mobile device chipsets. With that number one spot, Qualcomm has reported Q3 General Accepted Accounting Principles or GAAP net profit of $2.2 billion with sales of $6.8 billion. Qualcomm’s CEO, Steve Mollenkopf said about the reports, “We are pleased to report another record quarter with revenues, earnings per share and chip shipments reaching all-time highs,” Mollenkopf continued to say, “Looking forward, although we have lowered our near-term financial outlook for the licensing business, we are pleased to be raising our fiscal year earnings per share guidance on better than expected performance in our semiconductor business.” This report is just par for the course for Qualcomm since over the last few years they have seen growth. They have been used to seeing a 35 percent increase year-over-year until just recently. This past April, Qualcomm only saw a 4 percent increase during that quarter. Though the momentary slight decrease could be due to slowing sales in the mobile device markets. While sales may be stable if not growing fast for devices, the price average is where Qualcomm feels the hit.
The average worldwide price of smartphones were $337 and a research firm known as IDC has forecast that in 2017, the average price will drop to roughly $265. Emerging markets are the focus which explains the lower average price of mobile devices. Ramon Llamas from IDC says, “Every vendor is closely eyeing how far down they can price their devices while still realizing a profit and offering a robust smartphone experience.” Which may be true, but Qualcomm is still waiting for the advancing technologies in China to catch up. China Mobile has around 765 million smartphone users in their market that is still transferring to a TD-LTE service. That upgrade in the service will require more sales of new chipsets from Qualcomm. However, retailers in China are still using old stock of TD-SCDMA while LTE rolls out. While Qualcomm is dealing with minor issues in China, their stock is still on the rise. Just the past year, they have seen a 10 percent rise in shares. Over the last five years, Qualcomm has seen a total rise in shares of 72 percent.