Is the smartphone industry facing problems in 2023? Several reports from Canalys and Counterpoint previously showed smartphone production down by up to 15% in Q2 2023. Today Qualcomm published their financial report and it is clear that they are affected by the decline in smartphone production this year.
Qualcomm CDMA Technologies (QCT) which manufactures chips for smartphones, automotive and various smart devices posted a 24% decline in revenue in Q3 2023 compared to Q3 2022. Chip production for smartphones fell 25% while for wearables including VR/AR headsets a 24% decrease. Only chip production for automotive increased 13%. Qualcomm Technology Licensing (QTL) which licenses their patents also posted a 17% decline in revenue.
The company posted revenue of $8.44 billion in Q3 2023 and this was slightly lower than the 8.5% expected by analysts. Despite the decline in revenue, Qualcomm CEO Cristiano Amon believes there will be a recovery as demand for AI chips is expected to increase.
Chips manufactured by Qualcomm will have the ability to run AI Llama-2 by Meta starting next year. With this capability, the AI needs of mobile devices can be processed directly without accessing cloud computing.