Qualcomm hints Apple 5G launch might be delayed

Qualcomm has warned 2020 financials might be impacted by a customer delaying a flagship launch, suggesting Apple might be facing some issues of its own.

While this is not ideal news for Qualcomm, the earnings call was filled with good news to blunt the impact of the bad. Having signed a long-term licencing deal with Huawei and revealing flat revenues for the quarter ending June 28, share price jumped 11% in pre-market trading.

“As 5G continues to roll out, we are realizing the benefits of the investments we have made in building the most extensive licensing program in mobile and are turning the technical challenges of 5G into leadership opportunities and commercial wins,” said Steve Mollenkopf, CEO of Qualcomm.

“We delivered earnings above the high end of our range, continued to execute in our product and licensing businesses and entered into a new long-term patent license agreement with Huawei, all of which position us well for the balance of 2020 and beyond.”

While these figures are certainly better than some would have expected for a period which has been ravaged by COVID-19, year-on-year comparisons are somewhat difficult. The same period of 2019 included $4.7 billion of revenues resulting from a settlement from Apple and an interim licensing agreement with Huawei.

This is all positive for investors, however the biggest news from this earnings call is actually focused on Apple.

“Our guidance for the fourth quarter of fiscal 2020 includes an impact of greater than ($0.25) to EPS attributable to a planning assumption of an approximate 15% year-over-year reduction in handset shipments due to COVID-19, including a partial impact from the delay of a global 5G flagship phone launch,” the press release states.

Although it is all assumptions for the moment, the flagship delay is most likely Apple. The iPhone manufacturer is one of Qualcomm’s most important customers and has slated the launch of the iPhone 12 for the autumn, allowing for a marketing frenzy ahead of Christmas. It seems Qualcomm might have confirmed the soap opera saga which has been Apple’s flagship launch.