Qualcomm says Chinese smartphone market recovering in wake of Coronavirus pandemic

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On March 19, Qualcomm CEO Steven Mollenkopf appeared on CNBC’s “Squawk on the Street” to discuss his firm’s status. During his visit, he discussed how his firm is coping with the impact of the coronavirus pandemic. Notably, the executive said the semiconductor company’s Chinese-based original equipment manufacturers (OEMs) are seeing a return to pre-outbreak demand.

Mollenkopf’s Comments on COVID-19

While being interviewed by CNBC’s Carl Faber, Mollenkopf offered some interesting insights regarding the Chinese smartphone market. The executive said Qualcomm’s Sino OEM clients experienced a dip in mobile device sales at the end of January. Though the company’s partners saw a drop off in handset activations through February, he said sales had recovered by early March.

Mollenkopf noted Qualcomm’s Chinese customers’ smartphone sales are now back to the level they hit in the same time frame last year.

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Qualcomm’s chief executive also said the region’s handset manufacturers had restored their supply chains to “70-80 percent” of their capacity. He also stated that Chinese OEMs are dedicating their resources to technologies that will specifically benefit his organization, such as 5G.

On Thursday, The Burn-In reported that International Data Corporation (IDC) recently published a report on the coronavirus’s impact on the global semiconductor industry. IDC noted that the component market could see growth in 2020, provided manufacturers focus on developing certain emerging technologies. The group listed fifth-generation mobile data networking tech as one of those areas.

Mollenkopf also touched on how Qualcomm has responded to the COVID-19 outbreak. The CEO said his company’s engineers are hard at work on product development, including new 5G components. He explained the chipmaker’s labs are down to essential personnel only as the majority of its employees work remote.

The head of Qualcomm also said the corporation has no plans to revise its 5G rollout schedule. Last November, the semiconductor company offered guidance that 225 million fifth-generation mobile network-enabled handsets would ship in 2020.

Canaccord Genuity Believes in Qualcomm’s Recovery

EE Times notes financial services company Canaccord Genuity shares Mollenkopf’s positive outlook on Qualcomm’s prospects. The firm holds the opinion that the company will rebound from the COVID-19 slump in the second half of this year. The organization based its prediction on a few interrelated factors.

Canaccord Genuity believes Qualcomm’s investment in 5G technology will pay dividends this year. The firm said the San Diego, California-based chipmaker would grow its dollar share among OEMs that manufacture Android-powered smartphones.

“Qualcomm has a strong leadership position for 5G that we believe should not only result in strong share gains with leading smartphone OEMs but also provide an opportunity of up to 1.5x the dollar content of a similar 4G customer smartphone,” noted the wealth management firm.

Last September, The Burn-In reported the chipmaker had developed fifth-generation mobile networking components for high-end and mid-range handsets.

The organization also highlighted Qualcomm’s relationship with Apple as a key contributor to its 2020 recovery. The semiconductor company will provide the Big Tech corporation with 5G antennas for its next-generation iPhones. Although the coronavirus outbreak has disrupted electronics production worldwide, Apple has reportedly started production on new mobile devices.

Although the COVID-19 pandemic has been a harrowing event for the entire planet, Qualcomm’s resilience in the face of adversity is reassuring.

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