Qualcomm’s fiscal earnings for Q2 2013 have exceeded its expected revenue for the quarter. The chip designer has raised its estimated device shipments for 2013 based on the strength of the quarter. New Qualcomm Snapdragon 600 and 800 processors are facing a high demand in emerging markets as smartphone sales continue to soar. Paul Jacobs, the company’s CEO stated that they expect healthy growth globally in 3G and 3G/4G multimode devices. The company shipped 173 million Mobile Station Modem (MSM) Chips which represents a 14% year over year increase.
The company’s revised annual revenue projection is now between $24 billion and $25 billion, this has seen its annual earnings per share fall between $4.40 and $4.55 for the year. Earlier projections had put revenue between $23.4 billion and $24.4 billion, placing earnings per share between $4.25 and $4.45. Qualcomm has also lowered average selling prices per phone to $224 from $226. Payments on royalties have seen Qualcomm receive an average price of $214 to $220 per phone.
“Revenue in the third quarter will rise to $5.8 billion to $6.3 billion,” said Qualcomm, “compared with an average analyst prediction of $5.88 billion. Average selling prices will increase from the second quarter as new, more expensive phones come to market.”
The emerging markets which particularly favor Qualcomm’s lower-priced chips have seen the company make a lot of gains, however this has its draw backs as it comes at the cost of profitability for the company. The company draws a bulk of its revenue from baseband chips, these are used by mobile phones to connect to cellular networks. Qualcomm has also benefitted from first mover advantage by providing the original modem chips that support the long-term evolution standard (LTE). According to researcher Forward Concepts, Qualcomm account for more than 90 percent market share in LTE.