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Appeared on: Thursday, November 08, 2012
Demand For Smartphone Chips Fuel Qualcomm Sales, Profit

Qualcomm is forecasting sales and profit that exceeded analysts? estimates, helped by the increased consumer demand for smartphones.

Earnings in the current period will be 90 cents to 98 cents a share on revenue of $5.6 billion to $6.1 billion, Qualcomm said yesterday in a statement.

Qualcomm is benefiting as consumers in developed nations snap up the newest phones and as those in emerging markets upgrade their devices, Chief Executive Officer Paul Jacobs said. The company also is pulling in more license revenue from its technology standards that provide high- speed data connections in smartphones.

Jacobs said earnings are being bolstered by strong worldwide demand for smartphones, emerging-market consumers upgrading to more expensive handsets and increasing supply of his latest chips.

Earlier this year, limited supply from contract manufacturer TSMC was requiring it to increase spending and enlist other vendors. Shortages had forced some customers to postpone the introduction of new smartphone models. Those phones are now going on sale, lifting Qualcomm's chip sales and licensing revenue.

Qualcomm's revenue mainly comes from baseband chips sold to wireless device makers such as Samsung, Apple and HTC. The bulk of the company's profit comes from the licensing of so-called code division multiple access (CDMA) technology.

The company is offering its Snapdragon application processors for phones and tablet computers.


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