Transcript
Cristiano Amon (0:02)
Bloomberg Audio Studios Podcasts, Radio news.
Bloomberg Host 1 (0:07)
Let's focus in on Qualcomm shares right now down about 8% on track for their biggest drop since last summer. At one point in the session we were down 11% on track for the biggest drop since March of 2020. The world's largest maker of smartphone processors issued a lackluster revenue forecast raising some concerns that memory supply constraints could push prices higher, which in would weigh on the handset demand. Joining us to discuss is Christian Cristiano Amon Qualcomm CEO Cristiano, good morning. Thank you tech. I give you that what's happening in memory is completely outside of your control. Right. But the, the forecast for the current period of sales up to $11 billion. I suppose one way of looking at it is how much better would that have been were the market not so constrained by the supply of memory right now but also the pricing pressure that supply deficit puts in place.
Cristiano Amon (1:06)
Yeah, look, it's a very interesting situation. You know, in one hand I'm incredibly happy with the business. Everything is going well. Demand is strong. Macroeconomic indicators are good. Demand for handset is strong. We have seen, we had like a record quarter in Q1. We saw all of our customers reporting sell through data better than expectations. But then the industry is now defined by the availability that memory that is is going to be available for consumer electronics. And it creates, you know, a sudden change in how OEMs look at of their build plan and they say look, I have to size the size of the market not based on demand but the memory that I can get for consumer electronics and that will make it like this unique period. There's.
Bloomberg Host 1 (1:59)
Go ahead, let me jump in. But you know, within that market there are some specific interesting case studies. Right. The premium segment is good like from a demand side particularly in China. So usually like in any hardware environment where you're supply constrained but demand is high, like that's a good thing. And increasingly like think about the content in the phone that you provide. How can you kind of navigate this to your advantage?
Cristiano Amon (2:27)
Yes, and that's a great observation. That's why I think there's a lot of, I think a lot of unnecessary, I think speculation right now. Here's, here's what's going to happen. We saw this with COVID OEMs. The first thing they're going to do, they're going to prioritize premium and high tier, you know, because those are more resilient I think to price increases. They are, we are going to see probably adjustment in prices on handsets. And because, you know, demand it is strong, it is very likely that the premium and the high tier is going to be less impacted than the mass tier on phones. And we have seen that the premium tier continue to expand regardless. Regardless over the several years the premium tier is expanding and we are more concentrated on the premium, the high tier. So your, your theory is 100% correct. All that happen is OEMs had thinking about a particular size of the year that got resized by the memory availability. They're adjusting their build plans and we're going to see how this is going to play out in the next few quarters. That's, that's really the story. The good thing is demand is high.