Qualcomm Says it Lost a “Large Customer”
Things for Samsung are going pretty bad lately, having had its profit for this quarter slide by a whopping 36 percent over the same time last year. But it seems that Samsung is making its dismal smartphone fortunes felt elsewhere – like, say, Qualcomm, the apparently former provider of mobile CPUs for the company’s many handsets.
Reports from last week revealed that Samsung would be dropping Qualcomm’s ubiquitous Snapdragon processor from its upcoming Galaxy S6 flagship handset. Seemingly confirming those rumors, Qualcomm stated in yesterday’s earnings report that it was revising its revenue estimates for the second half of the fiscal year. According to Qualcomm Incorporated CEO Steve Mollenkopf:
“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. These changes reflect our revised expectations related to OEM mix, sales to a large customer and heightened competition in China.”
The report gets a bit more specific – but never so specific as to mention Samsung by name – when it elaborates on its lowered revenue expectations because its “Snapdragon 810 processor will not be in the upcoming design cycle of a large customer’s flagship device.”
That’s some rough stuff for Qualcomm, since Samsung can be relied upon to make a lot of phones. Losing the Galaxy S6 means a major drop in sales for the chip-maker.
It makes sense, though; Samsung is looking to cut corners, and going internally for its own processor rather than paying Qualcomm’s prices can only have a better effect on its bottom line. That said, Qualcomm’s processors show up in so many phones for a reason – the company must be good at what it does. Samsung is working hard to improve its sales, but going with a different chip, which may or may not be as reliable as Qualcomm’s, might be pennywise but pound foolish.