Asa Fitch reports in The Wall Street Journal that chip makers are expecting a surge in smartphone sales as consumers purchase 5G phones. Fitch writes:
Mobile-phone chip-making giant Qualcomm Inc. QCOM 12.64% expects a surge in smartphones sales next year as consumers flock to 5G-capable devices such as Apple Inc.’s new iPhone 12 that helped lift its latest results.
Qualcomm, a leading supplier of the chips powering 5G equipment, is projecting shipments of 450 million to 550 million 5G smartphones in 2021, at least double the expected total this year.
Handset sales were the big driver of the company’s earnings in the latest quarter, Chief Executive Steve Mollenkopf said, adding that Qualcomm also is seeing benefits from other kinds of devices using its 5G chips. They included internet-of-things devices and networking gear, he told analysts Wednesday.
“I would argue Covid has convinced people that these technologies are now even more important than they thought they were,” he said.
Telecommunications providers and analysts are betting that Apple’s launch last month of several 5G-capable phones will give a boost to demand for such services. “Until now, most people have taken a wait-and-see approach to 5G. They’ve been waiting for 5G to get real,” Verizon Communications Inc. CEO Hans Vestberg said at Apple’s virtual launch event, adding the iPhone 12 “the wait is over.”
Qualcomm is expected to be a major beneficiary of Apple’s 5G phones. Mr. Mollenkopf said the company’s sales for the quarter ended in September reflected some of that business but would be more substantial in later quarters.
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