Qualcomm hit by China fine, cut in Samsung business

From PC World: Qualcomm’s second-quarter profit dropped 46 percent, mainly because of a large fine the company had to pay in China for settling antitrust issues.

The chip company also cut its revenue outlook for 2015, citing loss of business for its Snapdragon processor from key customer Samsung Electronics and a concentration of the premium market around two players - Apple and Samsung, among other factors.

Qualcomm lost business from Samsung as the South Korean vendor decided to use its in-house Exynos processor rather than the Snapdragon 810 chip in its flagship Samsung Galaxy S6 and S6 edge smartphones. The impact on Qualcomm has been large because makers like Samsung have decided to focus on newer products rather than legacy products. The chipmaker does not expect an immediate shift in its share of components in Samsung’s premium devices.

The company cut its revenue guidance for fiscal 2015 to the range of US$25 billion to $27 billion, down from a previous outlook of $26.3 billion to $28 billion.

Qualcomm’s Snapdragon 810 has done well with other handset makers with over 60 premium phone design wins including from LG, Sony and Xiaomi, said CEO Steve Mollenkopf in an analyst call on Wednesday. The new Snapdragon 820, scheduled to ship in the second half of this year, has also had good response, he added.

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