The one-year and a half long "mobile winter" is showing signs of recovery. Qualcomm, the leading mobile chip company, reported in its latest quarterly report that its revenue and profitability were better than expected, and it earned a whopping $9.5 billion for the entire year.
On November 2nd, Qualcomm released its quarterly report for the fourth quarter from July to September and its annual performance report for the fiscal year 2023. Under the non GAAP rule, the revenue for the fourth quarter of fiscal year 2023 was $8.67 billion, a decrease of 24% year-on-year; The net profit was 2.28 billion US dollars, a year-on-year decrease of 36%.
Qualcomm also expects revenue to reach $9.1 billion to $9.9 billion in the first quarter of the 2024 fiscal year, indicating that Qualcomm believes that the quarter from October to December will be more "prosperous" than the previous quarter.
After the release of this financial report, Qualcomm rose 3.83% in the US post market, closing at $115.14 per share. However, compared to seven quarters ago, at the end of 2021, Qualcomm's stock price has fallen by about 40%. According to the closing price on November 1st, Qualcomm's market value is still as high as $123.753 billion.
According to the quarterly report already released, Qualcomm announced that its revenue for the fiscal year 2023 was $35.83 billion, a year-on-year decrease of 19%; The net profit was $9.486 billion, a year-on-year decrease of 33%.
In terms of product segmentation, it can be seen that throughout the 2023 fiscal year, mobile device product sales were $22.57 billion, which is Qualcomm's highest proportion of business, but decreased by 22% year-on-year; The sales revenue of automotive related products was 1.51 billion US dollars, but increased by 24% year-on-year; IoT product sales were $7.353 billion, a decrease of 19% year-on-year.
The contraction of mobile devices and IoT products reflects the "cold winter" of the consumer electronics market. Qualcomm is referred to as the 'Android phone king', reflecting that flagship smartphones in the market usually carry SoC chips designed by Qualcomm. In addition, Qualcomm's other types of chips are also heavily equipped in consumer electronics products such as Apple smartphones and Meta's Headworn Device Quest.
However, in recent years, Qualcomm has faced fierce market competition. According to a report released by market consulting firm Counterpoint in September, Qualcomm's global market share ranged from 19% to 34% in the six quarters ended June 2023, while MediaTek's market share ranged from 30% to 36%. Especially in the fourth quarter of 2022, Qualcomm's market share fell to 19%, while Apple's market share reached 28%, indicating that Qualcomm's market space was severely squeezed.
Regarding the latest quarterly report, Qualcomm CFO Akash Palkhiwala stated that Qualcomm sees early signs of stable global demand for 3G, 4G, and 5G smartphones. However, the recovery of the mobile phone market remains unstable. According to a report released by Counterpoint in October, global smartphone shipments decreased by 8% year-on-year in the third quarter of 2023, marking a ninth consecutive quarter of decline.
However, the report is relatively optimistic about future expectations. After a strong September, we expect this trend to continue until the end of the year, first with the impact of the full launch of the iPhone 15 series and the arrival of the Indian holiday season, then with the 'Double Eleven' promotion in China, and finally with cross regional Christmas and year-end promotions. In the fourth quarter of 2023, we expect the market to stop year-on-year decline, "Counterpoint predicts.
In addition to the recovery of the mobile phone market, which will alleviate Qualcomm's performance pressure, artificial intelligence has also become another development path for Qualcomm.
As we enter the era of generative AI, we see an unprecedented pace of innovation. Generative AI on devices and AI in the cloud are developing in parallel, generating new applications.
In just the past October, Qualcomm released new Android and Windows PC chips, improving the artificial intelligence part known as NPU, facing the "generative AI wave". Among them, the new Snapdragon X chip integrates Oryon CPU with ARM architecture, Qualcomm Adreno GPU, and heterogeneous AI engine, aiming to achieve breakthroughs in the PC market, challenging Apple chips with ARM architecture and Intel PC chips with x86 architecture.