Handset revenues were down 25 percent, year over year, in the most recent quarter to $5.3 billion, reflecting the macroeconomic environment and a slower recovery in China, according to Qualcomm’s fiscal year third quarter 2023 earnings report. IoT revenue was down 24 percent, YoY, to $1.5 billion, as channel inventory remained elevated because of weaker demand.
Even so, Qualcomm reported that its quarterly revenues were within its guidance range, according to third fiscal quarter results reported this week, and its Snapdragon 8 Gen 2 will continue to be used in Samsung’s newest flagship device lineup globally, the Galaxy Z Flip5, Galaxy Z Fold5 and the Galaxy Tab S9 series.
“We have successfully executed on our fiscal ’23 cost actions and are on track to exceed our commitment of a 5 percent reduction compared to fiscal 2022,” said Akash Palkhiwala, Qualcomm Chief Financial Officer.
One bright spot for Qualcomm in the quarter was automotive sales, which were up 13 percent to $434 million. It was the 11th straight quarter of double-digit growth, YoY.
“We believe the automotive industry will use some of the most advanced edge AI capabilities from large language models for personalized and curated content and services, driver and occupant monitoring and AI virtual assistants to contextual search,” said Cristiano Renno Amon, Qualcomm President and CEO.
On a sequential basis, Qualcomm is forecasting Android handset revenues to be flat in the next quarter, with mid-single-digit decline in IoT and low double-digit growth in automotive.
“Since it remains difficult to predict the timing of a sustained recovery and customers remain cautious with purchases, we continue to operate under the assumption that inventory drawdown dynamics will be a factor through the end of the calendar year,” Palkhiwala said.
By J. Sharpe Smith, Inside Towers Technology Editor
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