Shares of Qualcomm (QCOM) - Get QUALCOMM Incorporated Report and other other Apple (AAPL) - Get Apple Inc. Report suppliers were dropping Monday after a media report said Apple's 5G baseband chip could be used in the iPhone as soon as 2023.
AppleInsider cited TF International Securities analyst Ming-Chi Kuo in making its prediction. Kuo sees Qualcomm having to change its strategy to combat order losses from Apple.
“As Android (GOOGL) - Get Alphabet Inc. Report sales in the high-end 5G phone market are sluggish, Qualcomm will be forced to compete for more orders in the low-end market to compensate for Apple’s order loss,” Kuo said, according to AppleInsider.
Meanwhile, Bloomberg Intelligence analyst Anand Srinivasan said that while Apple's reported 5G chip progress hurts sales for Qualcomm's chip-technology segment, it will not hurt its royalty revenue.
Qualcomm shares at last check dropped 4.7% to $131.32.
Other chipmakers were also weaker Monday with Nvidia (NVDA) - Get NVIDIA Corporation Report falling 2.%9, Advanced Micro Devices (AMD) - Get Advanced Micro Devices Inc. Report off 2.6%, Broadcom (AVGO) - Get Broadcom Inc. Report down 2.1% and Micron Technology (MU) - Get Micron Technology Inc. Report giving up 5.2%.
Two weeks ago, Qualcomm reported fiscal-second-quarter results that topped estimates.
The San Diego chipmaker reported earnings of $1.90 a share as revenue rose 52% from a year earlier to $7.93 billion.
Analysts were expecting earnings of $1.67 a share on revenue of $7.62 billion, according to FactSet.
The figures were "driven by sustained demand for smartphones globally and our ability to increase the scale of our non-handset revenues,” Chief Executive Steve Mollenkopf had said in a statement.
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