As an important chip supplier for global "AI smartphones" and "AI PCs", Qualcomm's latest financial report clearly demonstrates the bright prospects of the "AI wave sweeping the high-end smartphone market".
On Thursday morning Beijing time, Qualcomm released its third quarter report as of June 23 this year. The company sold various chips and system services (QCT business) worth $8.069 billion during the traditional off-season from April to June this year, an increase of nearly $900 million compared to the same period last year. In addition, patent licensing fees (QTL sales) from 5G and cellular network technologies increased slightly by 3%, reaching $1.3 billion.
As Qualcomm's main source of revenue, the revenue from smartphone related businesses reached $5.899 billion in the previous fiscal quarter, an increase of 12% year-on-year. The revenue of $800 million from the automotive chip business, although not a significant proportion, has grown at a rate of 87%; Finally, revenue from low-cost device chips, Quest headset chips, and AI PC chips (collectively referred to as IoT business) decreased to $1.359 billion.
(Source: Qualcomm Financial Report)
China's mobile phone chip revenue increases significantly
During the off-season from April to June, Qualcomm was able to maintain a prosperous revenue, thanks in no small part to its performance in the Chinese market.
Although detailed data was not provided in the financial report, Qualcomm's management repeatedly stated during the earnings call that Qualcomm's revenue from Chinese smartphone manufacturers increased by 50% year-on-year during the reporting period.
Behind this, consumers' desire to master "AI phones" remains the core driving force.
Qualcomm CEO Cristiano Amon said on a conference call, "Artificial intelligence has expanded the scale of the high-end mobile phone layer. Therefore, even in a market with slow growth and low single digit growth, the high-end market is growing at a faster rate, and we have seen this
Amon also expressed satisfaction with the current development trajectory of mobile AI functions. Although it is still in the early stages, use cases are becoming increasingly interesting. He also pointed out that similar to Samsung, several Chinese mobile phone manufacturers will add more AI usage in their next flagship phones.
This quarter has not been entirely smooth sailing either. Qualcomm mentioned during a conference call that due to the revocation of its chip export license to Huawei in early May, the previous quarter, as well as the current months of July to September and the following fiscal quarter, will all be affected. In addition, the 5G technology patent authorization agreement between the company and Huawei is also about to expire, and the two parties are still in negotiations.
Qualcomm expects sales for the current quarter to be between $9.5 billion and $10.3 billion, while Wall Street's expectation is $9.71 billion. It is worth mentioning that Qualcomm's fourth quarter this year will add an additional week, partially offsetting the impact of unfavorable factors.
AI PCs will be cheaper
Some investors may have noticed that the IoT business, which includes AI PC chips (Snapdragon X), experienced a decline in revenue during the reporting period. On the one hand, Qualcomm's AI PCs were not launched on a large scale until mid to late June, and on the other hand, the prices of these computers were generally relatively high.
At present, the Microsoft Surface laptop equipped with Snapdragon X Plus chip ($999, priced at over 8000 in China) is already the cheapest Qualcomm AI PC. If you want to buy a computer with Snapdragon X Elite chips, the price will have to run towards 10000 yuan.
Qualcomm stated that by 2025, the price of Snapdragon AI PCs is expected to drop to the level of $700 (approximately RMB 5000), and more importantly, AI (NPU) performance will not be compromised due to price.
Amon stated during the conference call that looking ahead to 2025, the Qualcomm X-series product roadmap will also expand to PCs with retail prices as low as $700 without compromising on NPU performance.
However, the PC mentioned by Amon may not necessarily be a complete laptop, but could also be a mini desktop computer like Dev Kit.
During the conference call, Qualcomm refused to disclose the sales and financial data of the first wave of Snapdragon AI PCs, stating that it is "too early" to draw conclusions now. However, the company also confirmed that it has collaborated with computer manufacturers to develop the next generation Copilot+PC, and stated that more PC products will be released at the Berlin International Broadcasting Exhibition (IFA) on September 6th.