Qualcomm's revenue guidance slash possibly foretells Q2 iPhone sales volume

Posted:
in AAPL Investors
An analyst has examined Qualcomm's earnings reduction as a result of Apple withholding royalty payments for wireless chips, and believes that Apple is on track to sell about as many iPhones as it did during the same time frame from 2016.




Wells Fargo analyst Maynard Um has gleaned some data from Qualcomm's reduction in earnings warning. Given that Qualcomm has reduced guidance by $500 million, Um wrote in a research note provided to AppleInsider that this roughly translates into 51 million iPhone unit sales for the last quarter.

Um's assumptions are based on a $665 average selling price per iPhone, a 40 percent margin, and a royalty rate of 2.7 percent. In the holiday quarter flush with iPhone 7 sales, Apple garnered $695 per iPhone, with Apple's second fiscal quarter from 2016 just after the launch of the iPhone SE earning $642 per iPhone.

Apple sold 51.2 million iPhones in the expected seasonally light year-ago quarter, with a gross margin of 39.4 percent.

Apple will report the results of its second fiscal quarter of 2017 after U.S. markets close on May 2.

In January, Apple filed a $1 billion lawsuit against Qualcomm, accusing it of abusing its market dominance to obtain unfair royalties. Earlier this month Qualcomm launched a countersuit, arguing that Apple broke contract and really wants to pay less than fair market value for patents.

On Friday, Qualcomm declared that Apple is no longer paying iPhone manufacturers for any of the royalties it owes, and is planning to withhold them entirely until current lawsuits are resolved.

"Apple's continued interference with Qualcomm's agreements to which Apple is not a party is wrongful and the latest step in Apple's global attack on Qualcomm," said Qualcomm general counsel Don Rosenberg. "We will continue vigorously to defend our business model, and pursue our right to protect and receive fair value for our technological contributions to the industry."

Comments

  • Reply 1 of 6
    Yes but that does not account for the fact that Apple is using Intel modems in some iPhone 7 models. So wouldn't it be more then? 
  • Reply 2 of 6
    foggyhillfoggyhill Posts: 4,767member
    They're using Intel modems in unknown quantities, only opening up a substantial amount widely could tell you exactly how many, so again very clicky baity flawed logic for the so called analysts (stock pushers).
  • Reply 3 of 6
    ksecksec Posts: 1,558member
    I really like Ericsson 5G royalty approach, based on a fixed amount. And will be an advantage to Apple because it would means higher rate ( comparatively speaking ) to lower ASP mobile phone makers. 
  • Reply 4 of 6
    SpamSandwichSpamSandwich Posts: 31,095member
    Stellar work there Um. /s
  • Reply 5 of 6
    gatorguygatorguy Posts: 20,586member
    ksec said:
    I really like Ericsson 5G royalty approach, based on a fixed amount. And will be an advantage to Apple because it would means higher rate ( comparatively speaking ) to lower ASP mobile phone makers. 
    Ericsson says $5 per handset will be the standard rate.... but only if that phone licensee "reciprocates". That means agrees to cross-license which Apple has had an on-again/off-again problem with, but almost certainly agreed to in their most recent contract with them.

    Ericsson also went on to say that royalties could be half that rate, as little as $2.50/handset for less-expensive devices and determined on a per-case basis. 
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