Qualcomm forecasts weak quarterly profit, expects Apple revenue drop to accelerate
Qualcomm logo is displayed at the company’s booth at the 8th China International Import Expo (CIIE) in Shanghai, China, November 5, 2025. REUTERS/Maxim Shemetov
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July 29 : Qualcomm forecast fourth-quarter profit below Wall Street estimates on Wednesday, and said revenue from Apple products would decline faster than expected as supply constraints and rising costs weighed on its business.
Shares of the San Diego, California-based company were down more than 3 per cent in extended trading.
In an interview with Reuters, CEO Cristiano Amon said costs had risen not just for memory chips, but across the supply chain.
Qualcomm plans to raise prices starting September 1 in an effort to return its margins to historical levels, he said.
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“We’re just passing through big cost increases that we have,” Amon said, noting that Qualcomm will have to negotiate with each customer. “The temporary disconnect between cost and pricing causes a slight decline temporarily in gross margin.”
Qualcomm also said it expects revenue from Apple products to decline more quickly starting in the fourth quarter as supply constraints reduce its share of components used in the next iPhone launch to well below its earlier estimate of 20 per cent.
“It’s availability of supply,” Amon told Reuters of the Apple share change.
For fiscal 2027, the company expects the majority of its chip sales will come from categories other than smartphones.
“We kind of replaced Apple with the data center,” Amon said.
Qualcomm has been expanding into the fast-growing AI data-center market, and is targeting $5 billion in revenue from the business by fiscal 2027 and $15 billion by 2029.
“These results show that as Qualcomm is diversifying, it has lost focus on its core mobile market,” Seaport analyst Jay Goldberg said. “They are seeing share shift away from them in Android and have lost almost all remaining share at Apple.”
Qualcomm expects adjusted profit to be between $2.05 and $2.25 per share in the fourth quarter, below analysts’ average estimate of $2.36, according to data compiled by LSEG.
It forecast revenue of between $9.7 billion and $10.5 billion during the period, compared with estimates of $10.02 billion.
Revenue in its chip segment is expected to be between $8.4 billion and $9 billion, while analysts were expecting $8.49 billion.
Qualcomm reiterated that revenue from Chinese phone makers bottomed out in the third quarter as customers worked through excess inventory.
Xiaomi, Oppo and Vivo posted the steepest shipment declines among the top five global smartphone vendors in the June quarter, according to Counterpoint Research.
While unit sales of Android phones began to recover, Amon said handset makers were forced to raise prices, which in turn prompted buyers to look toward the bottom end of the premium phone segment, or even at older models, both of which hurt Qualcomm margins.
“There was a mix change versus what we expected,” Amon said.
Revenue from its handset unit, which makes chips for smartphones, fell 20 per cent to $5.09 billion in the third quarter, dragging the chip segment’s revenue down 5 per cent to $8.50 billion.
Analysts polled by Visible Alpha expected handset revenue of $4.96 billion.
Qualcomm’s broad exposure to devices such as smartphones makes its results a closely watched indicator of demand trends across consumer electronics.
Its third-quarter revenue fell 4 per cent to $9.95 billion, beating estimates of $9.67 billion. Adjusted profit came in at $2.21 per share, compared with estimates of $2.23.
Source: Reuters
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