Qualcomm Inc said on Thursday, semiconductor chips from smart watches, connected speakers and other devices outside its core business of chips for mobile phones are expected to bring in more than $1 billion in sales this fiscal year.
The figure came from the most recent data point that the company released to prove it can diversify its revenue sources since its $44 billion deal to buy Dutch chipmaker NXP Semiconductors fell apart last month.
The sales of “internet of things,” or IoT, chips constitutes about one fifth of the $5 billion in revenue that Qualcomm CEO, Steve Mollenkopf claimed. The San Diego chipmaker believes it will make outside the mobile phone market.
Coping up to the pressure to prove mettle of the Qualcomm in market
The market for processor chips for phones as well as modem chips that let phones connect to wireless data networks, counting firms like Samsung Electronics Co and Apple Inc as major customers is dominated by Qualcomm. The sales of smart phones hasbeen paced down in recent years though and are growing slowly. Qualcomm had sought to purchase NXP, a dominant supplier to the automotive market, where car makers are adding more chips to vehicles each year to respond to that broader trend. That deal fell apart last month after failing to secure approval from Chinese regulators.
Now, investors have put Mollenkopf under pressure to show he can expand Qualcomm’s sales without NXP’s help.
Qualcomm had not given any information about the composition of that $5 billion until Thursday,while it had disclosed that it expected $5 billion in non-mobile chip sales this year, up from $3 billion last year. Beyond IoT chips, networking chips, Qualcomm’s own automotive chips and a few other areas make the rest of the $5 billion.
Typically small, battery-powered devices that are becoming more common are powered by Qualcomm’s chips for the IoT market. Qualcomm chips are now in more than 200 kinds of so-called wearable devices and 1,300 different wireless headsets, earbuds and wireless speakers, the tech giant claimedin a statement released beforehand to a planned briefing with analysts on its progress.
Without disclosing any specific dollar figure, the company also said it expects revenue growth from chips for wireless, internet-connected cameras to increase 120% this year juxtaposed to last year.
