Updated from 2:14 p.m. EDT

Qualcomm

(QCOM) - Get Report

raised its operating income and sales targets for its June quarter Thursday, but a slowdown in cell-phone sales and falling prices provided a mixed picture.

In its customary fashion, Qualcomm added some caution to its forecast for the upcoming quarter. While demand remains strong, Qualcomm CEO Paul Jacobs said, the global recession has put a pinch on business looking ahead to the September quarter.

"Due to the current economic environment we remain cautious and currently project a modest sequential decrease in chipset shipments," Jacobs said in a press release.

The San Diego-based wireless chip shop says its adjusted operating income, excluding one-time charges, would be in a range of $1.06 billion to $1.11 billion, up from prior guidance in the range of $850 million.

Qualcomm says sales for the current quarter ending June 28 are expected to be between $2.67 billion to $2.77 billion. Previously, the company had expected revenue in the $2.5 billion range.

On chips, Qualcomm now expects shipments of its CDMA parts to be between 94 million and 95 million, up from the 89.5 million range it had previously targeted. Given Jacobs' comments about a sequential decline in the September quarter, that would put chip shipments below the 94.5 million range.

Phone sales offered Qualcomm a less encouraging picture. The company now expects 110 million CDMA devices were sold last quarter, which is only slightly more than the 109.5 million previously forecast.

And the average price of a phone dropped dramatically by Qualcomm's estimates. In the June quarter the average price fell to $191 from $196 in the prior quarter and well below the $201 level in December, as price wars and market shifts cut into CDMA phone prices.

Qualcomm, like rival

Texas Instruments

(TXN) - Get Report

and

Broadcom

(BRCM)

, supplies chips to nearly every phone maker including

Nokia

(NOK) - Get Report

,

Samsung

Palm

(PALM)

and

Motorola

(MOT)

.

Qualcomm shares were down 9 cents, or 0.2%, to $45.98 in recent trading.