In its forecast for the current quarter, leading smartphone chipset maker Qualcomm says that the world’s biggest smartphone market — China is returning to normal levels in terms of demand after the coronavirus outbreak.
The company predicts that it will generate about $4.4 billion to $5.2 billion in revenue for the second quarter of the year, i.e. Q2 2020. Qualcomm’s CEO Steve Mollenkopf said that the demand is “very close to the level it would be normally but the mix of 5G is better than we expected.”
Smartphone sales in China plummeted an unprecedented 22 percent during the first quarter after the COVID-19 outbreak forced companies to shut down their stores and production and supply chain were also compromised. But Steve Mollenkopf says that the issue has largely been fixed and future sales will depend on consumer spending levels.
While Qualcomm originally expected to ship about 175 billion to 185 billion modems in 2020, it’s no longer providing total market predictions. The company also said that it expects the smartphone industry to ship 30 percent fewer phones in the June quarter because of the COVID-19 crisis.
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However, the company adds that there will be relatively strong demand for 5G smartphones across 2020. This contradicts Strategy Analytics report which claims that 5G smartphone shipments will be lower in 2020 than originally anticipated.
Qualcomm has reported fiscal second-quarter revenue increase by 4.7 percent to $5.2 billion. This is in line with the company’s earlier forecast and has topped estimates. Net income for the company fell to $468 million from $663 million a year earlier.
The response of the Chinese market after the COVID-19 pandemic about how quickly it can get back on its feet is vital as it gives indication about how the European and North American market will emerge after the pandemic.
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