After officially launching mobile phone products equipped with the high-end Snapdragon 820 processor with its partners at the beginning of the year, Qualcomm further announced its financial results for the second quarter of fiscal year 3, ending March 27. These results showed that pre-tax revenue reached US$2016 billion, a 55.5% decrease from US$69 billion in the same period last year. The largest impact was still due to the slowdown in processor demand. However, net profit reached US$19.5 billion, an 11.6% increase from US$10.5 billion in the same period last year. This may be due to the higher average unit price of high-end processors.
According to QualcommSecond quarter financial results for fiscal year 2016, showing pre-tax revenue reaching $55.5 billion, a 69% decline from $19.5 billion in the same period last year. The primary factor impacting this decline is the saturation of the mobile phone market, which has led to a slowdown in demand for mobile processors from manufacturers. Last quarter, Qualcomm's cumulative sales of MSM chips reached 1.89 million units, a significant decrease from 2.42 million units in the previous quarter and 2.33 million units in the same period last year.
However, net profit reached US$11.6 billion, an 10.5% increase from US$11 billion in the same period last year. In addition, the average selling price (ASP) announced this time increased to the US$205-211 range, indicating that the net profit growth was related to the higher ASP of high-end processors such as the Snapdragon 820.
Considering the saturation of the mobile market, Qualcomm expects that the sales volume of MSM chips in the third quarter of fiscal 2016 may only remain at 1.75 million to 1.95 million units, and is expected to show a more significant downward trend.
Furthermore, the ongoing saturation of the mobile market, resulting in longer replacement times for consumers, coupled with last year's adjustments to the patent licensing fee model for the Chinese market, are expected to significantly impact Qualcomm's revenue. Consequently, Qualcomm began planning last year to shift its focus to data centers and the Internet of Things, applying its previously developed reference design market model for mobile devices to high-potential markets such as surveillance cameras and small drones.
Qualcomm has not yet announced whether it plans to make organizational adjustments. However, given that processor leader Intel has recently been forced to adopt a layoff policy in response to market changes to promote organizational changes in order to gain greater profit potential, Qualcomm may also make similar adjustments.
