July 19, 2024

Smartphone Sales Slump: Qualcomm Faces Challenges

2 min read

It seems like smartphones are having a tough time lately. Almost every brand is experiencing a decline in demand, except for Google. This downward trend is also affecting chip makers, and Qualcomm, the maker of Snapdragon SoCs, is feeling the impact.

In their recent earnings report, Qualcomm revealed that handset chip sales have dropped by 25% compared to the previous year. To make matters worse, their net income has also decreased by 52%. These disappointing numbers have resulted in an 8% drop in stock value after the report was released.

What makes this decline even more surprising is the fact that Qualcomm had signed a deal with Samsung to include their chips in all Galaxy S23 phones. One would expect sales to increase after such a partnership, but unfortunately, that hasn’t been the case.

The severity of these losses has led Qualcomm to consider cost-cutting measures, which may involve layoffs. The company stated in their report that they anticipate taking additional restructuring actions due to the uncertain economic and demand environment. These actions are expected to primarily consist of reducing their workforce and will likely result in significant restructuring charges.

Despite these challenges, Qualcomm is preparing to launch the Snapdragon 8 Gen 3 in late October. However, with the current state of the smartphone market, it’s uncertain how successful this new release will be.

Overall, it’s been a tough year for Qualcomm and the smartphone industry as a whole. While other brands are also facing declining sales, Qualcomm’s situation stands out due to their partnership with Samsung. Only time will tell if they can turn things around and regain their position in the market.

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