Qualcomm FY 4Q14 Earnings Call Notes

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This post is part of a series of posts called “Company Notes.” These posts contain quotes and exhibits from earnings calls, conference presentations, analyst days and SEC filings. Full transcripts can be found at Seeking Alpha

3G/4G device demand continues to grow, particularly in emerging markets

“We believe that global demand for 3G/4G devices continues to grow at a very healthy pace, particularly in the emerging regions at mid and low price tiers. The broad availability of compelling devices at these price tiers is driving demand for, and the migration to, 3G/4G devices.’

Global device shipments will hit 1.5 b in 2015

“Look forward to calendar year 2015, we estimate global 3G/4G device shipments to be approximately 1.5 billion units, up approximately 15% year over year. Turning to 3G/4G device ASPs, the ASP of devices reported to QTL during the fourth quarter of fiscal 2014 was $223 at the midpoint and $225 at the midpoint for the full fiscal 2014.’

2015 guidance reflects:

Our fiscal 2015 guidance reflects the following: continued healthy growth of global 3G/4G devices, particularly in emerging regions, at the mid and low tiers, which impact the financial outlook for both QTL and QCT; continued QTL challenges in China, coupled with increased spending on compliance and enforcement efforts by QTL; prioritize QTC R&D investments to maintain our leadership and balance our long term competitive roadmap with scale efficiencies to succeed across all price tiers, particularly the rapidly growing lower cost segments in emerging regions; a reduction and refocusing of our spend outside of QTC and QTL to a smaller number of potentially larger opportunities; focused efforts on our expanded set of adjacent growth opportunities.

Expect ASPs to fall

“We forecast that the global 3G/4G ASP will further decline by approximately 9% to 10% in fiscal 2015. Although we forecasted a modest year over year decline in the global 3G/4G device ASP at the outset of fiscal 2014, the global 3G/4G device ASP decreased more than we expected in fiscal 2014, driven by accelerated migration from GSM and TD-SCDMA devices to low and midpriced 3G/4G smartphones in emerging regions.”

ASPs should stabilize after 2015

“Beyond fiscal 2015, we expect further declines in the 3G/4G global ASP to moderate as the weighted impact of the factors that are driving the near term declines in ASP ease, and users in emerging regions trade up as they replace their low tier devices.’