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Qualcomm has lowered its outlook for the second half of the 2015 fiscal year, stating it expects its Snapdragon 810 processor will not be used in the flagship device of a large customer.The guidance comes on the back of a Bloomberg report last week that Samsung will use its own line of processors in its next flagship Galaxy S6 smartphone, having dropped the use of the Snapdragon 810 due to overheating issues.
Bloomberg reported people with direct knowledge of the matter as stating the Qualcomm processor overheated during testing.
In lowering its outlook, Qualcomm stated, among other potential impacts on its business, that it expects the Snapdragon 810 “will not be in the upcoming design cycle of a large customer’s flagship device”.
Qualcomm additionally cited increased competition in China as potentially impacting business.
Qualcomm’s outlook is further indication of the potential for Samsung to opt for its own line of Exynos processors for the S6.
“Qualcomm has a lot of market share but they have some customers with scale to do their own silicon, and it looks like that’s happening,” Reuters reported Bernstein analyst Stacy Rasgon as stating. “This may be a trend.”
Qualcomm has forecast revenue of US$26-28 billion for the 2015 fiscal year, down from its previous forecast of US$26.8-28.8 billion.
Qualcomm’s first quarter revenue of US$7.1 billion represented a 7 per cent year-on-year rise, while net income of US$2 billion was up 5 per cent year-on-year.
“Looking ahead, we have lowered our revenue outlook for our semiconductor business for the second half of the fiscal year and lowered our EPS expectations,” commented Qualcomm CEO Steve Mollenkopf.
“These changes reflect our revised expectations related to OEM mix, sales to a large customer, and heightened competition in China.”
