Qualcomm Sets Out Its 5G Stall for 2018

Dan Jones
2/1/2018
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Qualcomm is expecting its first 5G smartphone launches in the first half of next year, the company said on its fiscal first quarter 2018 earnings call on Wednesday night.

The chipmaker is expecting the 5G ramp to start early in 2019. "We are working with a number of OEMs that have smartphone launches in the first half of next year," said Cristiano Amon, newly appointed president of Qualcomm Inc. (Nasdaq: QCOM).

"5G... becomes a significant contributor of volume, we are really looking at fiscal 2020," he added during the Q&A session.

Qualcomm is working with AT&T, Ericsson, China Mobile, Nokia, NTT DoCoMo, Orange, SK Telecom, Sprint, Telstra, T-Mobile, Verizon, Vodane "and now, Samsung," on 5G network and device launches, Amon said. The first networks are expected at the end of 2018 and first smartphones in 2019.

Much of the carrier activity is focused around the first half of 2019. Amon says there's a "technology race" in South Korea to be first with 5G. "At least two US carriers," he says, are aiming for the first half of 2019, as is happening in Austria. Elsewhere in Europe, Amon is seeing three operators in the "UK and Germany" gunning for the same timeline. He expects 5G to materialize in Japan in the second half of 2019, with "significant activity" from China Mobile at the same time.

Amon and Qualcomm CEO Steve Mollenkopf also announced an "extended" and "amended" cross-licensing deal with Samsung Corp. at "the handset level" through 2023. This will cover the two for the early 5G era, and Samsung will be withdrawing its objections against Qualcomm with Korean regulators.

While Qualcomm views 5G as a significant long-term opportunity, the company still has some major near-term issues to deal with. Executives barely mentioned the unsolicited $103 billion Broadcom Corp. (Nasdaq: BRCM) bid on the call, but Qualcomm has pumped out plenty of material against the buyout ahead of a shareholder vote in March. (See Qualcomm Raises Profit Forecast for FY19, Citing 5G & More.)

The company is also hoping to get Chinese regulatory approval for its proposed $39 billion acquisition of NXP Semiconductors N.V. (Nasdaq: NXPI) "soon." (See Qualcomm Makes $39B Bet on NXP.)

Meanwhile, Qualcomm is expecting milestones in its legal licensing battle with Apple Inc. (Nasdaq: AAPL) this year. Executives also confirmed on the call that Qualcomm is trying to talk an as-yet unnamed vendor out of a similar licensing disagreement.

For the quarter, Qualcomm reported $6 billion in revenue and earnings per shares of $0.98, beating analyst expectations. The chipmaker reported a net loss of $5.95 billion, because of a $6 billion charge related to US tax reform and a $1.2 billion fine from the European Commission over Apple payments.

— Dan Jones, Mobile Editor, Light Reading

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