Displaying items by tag: revenue
As India prepares itself for the transition to 4G, Qualcomm has observed a 23% increase of revenue due to a demand surge for phones.
The American chipmaker powers more than half of all smartphones sold in India and posted sales of Rs 5,426 crore locking in a net profit of Rs 518 crore in FY18, financials sourced from research platform Tofler. The company’s growth slowed down from a year ago when it grew 39%, but has nearly doubled sales and profit over the past three years.
“There are two aspects that have stood out for India; one, this is a growing market for smartphones and two, the telecom carriers have also rapidly adopted 4G, which has transitioned this market totally from 3G to 4G and now is moving the 2G to 4G,” said Rajen Vagadia, country manager of Qualcomm India.
The telecom industry in the world’s second-most-populous nation is transiting rapidly to 4G data technology after the entry of RelianceNSE -0.39 % Jio. The Indian mobile network operator started services in September 2016, and helped spur data consumption in the country with its 4G-only network, meaning rivals Airtel and Vodafone were forced to slash its tariffs.
India mobile phone shipment crossed 300 million units for the first time ever with smartphones capturing almost 44% of the total volumes in CY 2017.
San Diego-based Qualcomm said it has evolved over the last few years supporting end-to-end product engineering, contributing to technology innovation in areas such as 4G, IoT and now 5G.
“This transition has been fuelled by solutions that Qualcomm provided, including the explosive growth of the Jio 4G feature phone at one end of the spectrum while our partners like Xiaomi have brought premium tier Snapdragon 845 at affordable prices,” Vagadia added.
Qualcomm’s Indian revenue doesn’t account sale of all its products in India however. A bulk of its transactions are with global suppliers in the US and China, which in turn market them in the country.
Shobhit Srivastava, research analyst, Mobile Devices and Ecosystems, Counterpoint Research says that most of the smartphones featuring Qualcomm’s Snapdragon chipset are in the mid and high tier segment, which explains the company’s billion dollar sales value in India.
”Qualcomm India can further grow its revenues given the OEMs (original equipment manufacturer) and ODMs in India start sourcing products directly with the advancing manufacturing and designing ecosystem in India,” he said in an interview to The Economic Times.
Qualcomm has helped bring features such as voice calls over a 4G LTE network and voice over Wi-Fi for consumers in India, by working closely with Indian cell carriers. The chipmaker said most companies were looking to launch major global technologies concurrently in India, making the country the first or second market for such rollouts.
US technology behemoth Apple has signed a new agreement with Samsung in relation to its streaming and content services in an effort to offset a decline in iPhone sales. The deal brokered between Apple and the South Korean conglomerate will enable the use of iTunes streaming services on Samsung smart TVs.
Swedish telecom equipment provider Ericsson published its Q3 financial results on October 20. The company reported a 6 percent year-on-year drop in third quarter revenue which accounted for SEK47.8 billion ($5.9 billion) while the loss was SEK4.8 billion ($590 million), worse than last year’s, reaching $24.5 million.
“We continue to execute on our focused business strategy,” said Ericsson President and CEO Borje Ekholm. “While more remains to be done, we are starting to see some encouraging improvements in our performance despite a continued challenging market.”
Networks showed a slight sales growth year over year. Networks adjusted operating margin was 11 percent. While losses continue in IT & Cloud, said Mr. Ekholm, the company sees increased stability in product roadmaps and projects.
“The general market conditions continue to be tough,” he said. “Sales adjusted for comparable units and currency declined by -3 percent year-on-year. Sales in North America, adjusted for comparable units, currency and the rescoped managed services contract were stable. We also saw growth returning in several countries as operators are increasing their investments in network capacity.”
Mainland China declined for Ericsson as the market is normalizing following a period of significant 4G deployments, representing more than 60 percent of global 4G volumes in the industry. The company managed to increase its LTE market shares in Mainland China to position Ericsson in 5G. However, this will have a dilutive effect on gross margin in Mainland China in Q4 2017, but the ambition is to continue to deliver double digit adjusted operating margin in Networks in Q4 2017.
Sales in Networks grew for Ericsson. Higher hardware capacity sales and a more competitive product portfolio resulted in an adjusted operating margin of 11 percent. The Ericsson Radio System portfolio, accounting for 55 percent of total radio volumes year to date, is proving competitive, Mr. Ekholm said, contributing both to improved earnings and a stronger market position.
In IT & Cloud, sales declined and losses increased in the quarter for Ericsson. The increase in quarter-on-quarter losses is largely due to higher amortization than capitalization of development expenses.
“Our turn-around plan builds on stability, profitability and growth in that order,” said Ekholm. “The initial focus has been on stabilizing both product roadmaps and challenging contracts. We have made good progress in the quarter. However, securing deliveries on large transformation projects puts pressure on gross margin in the near term.”
“The IT & Cloud business is of strategic importance as our customers are preparing for 5G and will digitalize their operations and invest in a future network architecture based on software-defined logic,” Mr. Ekholm added.
Ericsson will now expand its focus to improve profitability through increased efficiency in service delivery. In addition, the company will scale the software part of the business mix and increase the level of pre-integration services, which will lead to a higher gross margin but lower services sales. Positive effects on gross margin are expected in 2018.
“Despite continued decline in legacy product sales, there is good traction in our new media portfolio with several important wins in the quarter,” said Mr. Ekholm. “We have accelerated our efficiency measures and continue to pursue strategic opportunities for this business. Managing our cash is a top priority.”
Ekholm concluded, “We remain fully committed to our focused business strategy. We continue to invest to secure technology leadership and year to date we have recruited more than 1,000 R&D employees in Networks. Customers give positive feedback on both our long-term strategy and on our current 5G-ready portfolio.”
Chinese telecommunications colossus ZTE has attributed its first-half net profit success to its investment in 4G infrastructure and handsets. The world’s fourth-largest vendor of smartphones has hit its projected first-half net profit target forecast of 30%.
Analysts said that domestic telephone network providers continued to invest in 4G infrastructure provided by ZTE, and the firm also enjoyed a significant growth in the sales of its mobile devices. ZTE’s profit was $344M, whilst revenue rose by 13% which incidentally was also ZTE’s projected target.
In a statement released to the press, ZTE acknowledged that the organization has been presented with many new opportunities and expressed its vision to deploy 5G products and services. 5G standardization is expected to be established in 2018.
The statement read, “Looking to the second half of 2017, the company faces new opportunities," ZTE said in a statement in Chinese. "4G users and traffic will enter a peak period and pre-5G products will have more application, while 5G's standardization, technology and testing will experience a breakthrough."
ZTE reported more growth in relation to its telecom equipment sector, disclosing that revenue in that business grew by 13%. Its telecoms sector focus primarily on constructing infrastructure such as communications towers and accounts for 60% of overall revenue. ZTE’s remarkable financial results were cemented with the fact that its consumer business had also increased by a whopping 24%.
In March of this year, ZTE was left reeling after it was found guilty by the US Commerce Department for breaching US trade rules. It was fined almost $900M for breaking exports regulations. It’s the only smartphone vendor with a real presence in the US, and it has recovered well since that setback earlier this year, remaining the fourth-biggest vendor in the US after Apple, Samsung and LG.
ZTE executives have insisted they will continue to aggressively invest in wireless and 5G technology, whilst also revealing it aims to invest more in international marketing in the second-half of 2017. Revenue from ZTE’s smallest business area which is government and enterprise services has declined by 18%.
In addition to this, ZTE confirmed that it has agreed to sell 10.1% of its smartphone subsidiary Nubia for 727 million Yuan. That will reduce its equity in the company to 49.9%.
Qualcomm CEO, Steve Mollenkopf has claimed that 5G will represent a revenue opportunity of around $12 trillion by 2035. Mollenkopf made the statement when he was delivering his keynote address at Mobile World Congress Shanghai. However, the CEO of the global chip giant did express his belief that we have to utilize 4G technology. He said it was imperative we made the most of 4G and focused particularly on new gigabit LTE networks.
China Unicom has identified IoT as its key focus area in order to drive future revenue growth. However, despite China Unicom enjoying growth in mobile traffic, the organization expects to see mobile traffic growth decline significantly in the next number of years and will focus on IoT applications.
At MWC in Shanghai, Asia’s premier ICT industry and exhibition – China Unicom expressed its intentions to accelerate its NB-IoT rollout as parts of its strategic plan to expand its range of IoT services. Shanghai Unicom is a subsidiary of China Unicom and the firm’s General Manager Shen Hongbo stated that he doesn’t expect to see the company generate income from mobile traffic – instead suggesting that future revenue streams will be driven by IoT.
Shen said: “We’re seeing a bottleneck in subscriber growth in Shanghai, and we don’t see a lot more income being generated from traffic. More revenue will be generated from IoT converged businesses as well as content-related operations. We will have to rely on IoT to grow our business.”
In addition to this, Shanghai Unicom’s GM claimed that the IoT sector will be driven low-power, low-speed data collection applications like smart metering. Unicom has estimated that China’s low-power segment is at 3 billion connections – whilst the high-speed segment will be less than 200 million. Shen added: “So we’re first looking at the low-power, extended coverage market. This will be our priority.”
In 2016, China Unicom selected NB-IoT because it felt it was a more mature technology and decided to deploy LPWA technology. Analysts have claimed that China Unicom’s decision to do so was conservative suggesting it was ‘safe to go with the flow’ especially with many operators opting for NB-IoT running on 900MHz band.
China Unicom’s NB-IoT network covering all of Shanghai went live at the beginning of May, and has thus far been hailed a success. It was also disclosed that in addition to Shanghai, China Unicom has launched NB-IoT in Guangzhou, Shenzhen and Fuzhou with applications including smart parking, smart fire sensors and smart meter services.
Apple announced that it will be ending its relationship with Imagination Technologies over the next couple years. Under the relationship, Imagination provides Apple intellectual property that powers the graphics on iPhone screens, as well as tablets, iPods, TVs and watches. Imagination generates over half of its annual revenue from Apple each year, so when Apple announced that it was ending the relationship, the company's stock fell 72 percent.
Apple could have acquired Imagination Technologies, but instead decided to hire top talent to build the component technology in-house, according to analysts. The situation highlights a common issue among supplier relationships with large customers like Apple – Imagination, for example, benefits from increased revenues, but also faces high risk if they fail to maintain the relationship.
Other suppliers that rely heavily on Apple as a customer for revenues include Cirrus Logic (semiconductor supplier), Glu Mobile (developer and publisher of mobile games), and Aehr Test Systems. When Apple announced that it would be ending its relationship with Imagination Technologies, one of these companies saw its stock drop 9.9 percent due to fear that the same thing might happen to them.
"When done well, collaborative supplier relationships can be greatly intertwined in the product lifecycle – helping the procurement team manage the process from requirement and demand management onward while tracking process outcomes and progress," said JD Miler, Managing Director at BravoSolution. "But such tight handholding also has a myriad of opportunities to go sour."
The combination of cloud computing and the shrewd acquisition of LinkedIn by Microsoft has seen growth in the tech giants profits. In a financial statement Microsoft disclosed that profits rose by 3.6% in the second fiscal quarter to $5.2 billion- while revenues edged up by 1% to $24 billion.
Microsoft have changed strategy in recent years, and moved away from its dependence on solely developing software to providing a broader array of services. That positioning has been proved to be a good decision and the acquisition of LinkedIn boosted revenue, but reduced profit. Microsoft bought the personal social business network platform as part of its efforts to improve connections with customers.
The LinkedIn deal added $228 million in revenue, but it also erased $100 million in profit, another aspect of Microsoft’s positive financial performance was due to cloud computing – which pushed its market share up by almost 1%.
Microsoft CEO, Satya Nadella said the financial results confirmed that the organization’s decision to move away from its dependence on software to focus on new areas in cloud computing and artificial intelligence was the correct one.
The CEO said: “Our customers are seeing greater value and opportunity as we partner with them through their digital transformation. Accelerating advancements in AI across our platforms and services will provide further opportunity to drive growth in the Microsoft Cloud."
Other services which proved to be profitable was in Microsoft’s ‘intelligent cloud’ which rose by 8% - within that same sector – its Azure cloud computing unit saw an increase of 93% in revenue which was more than double than the previous year.
Microsoft reported a 10 percent jump in revenue from its productivity and business products, which include its Office suite of programs such as cloud-based Office 365. The personal computing segment, which includes the Windows operating system, saw a five percent drop in revenue in the quarter.
Microsoft also saw increases from its Bing search advertising and a drop in revenue from its Xbox gaming operations.
Apple reported on Tuesday, July 26, declines in every one of its major hardware businesses in the three months that ended in June. Industry analysts are questioning whether people have lost their affection for Apple, or if they are just waiting for the release of the new iPhones coming out in September. For whatever reason, it marks the second quarter in a row that sales have fallen for Apple as it struggles in a saturated U.S. market, making a gradual shift to services to drive the company’s profits.
Apple posted revenue of $42.4 billion, down 15 percent compared with the same quarter in 2015. The company experienced its first drop in sales in the quarter that ended in March this year, after spending the last five years as the world’s most valuable company. A New York Times report suggests that the introduction of the 4-inch iPhone SE released earlier this year may have contributed to Apple’s revenue and profit drop, because customers purchased the smaller and cheaper model instead of Apple’s larger, more expensive ones.
Ben Schachter, an analyst with Macquarie Securities, estimated that almost one-third of Apple’s quarterly profits came from services like App Store purchases, Apple Music subscriptions and the iCloud storage business. “Apple is moving from only iPhones matter to iPhones and services matter,” he said.
Research firm IDC reports that the number of iPhones sold this quarter dropped 15 percent, compared with the same time last year, and revenue tumbled 23 percent. What’s more, the number of Mac computers sold fell 11 percent, and the amount of iPads sold fell 9 percent. The worst sales result came from Apple’s latest product, the Apple Watch, with sales plummeting 55 percent compared with the same quarter last year, according to IDC.
Apple is expected to release new models and upgrades to its iPhone software in September, which happens every two years. Because this is widely known, many customers don’t purchase a new iPhone in the months before a release because they want to see if the latest upgrades are worth investing in. Therefore, Apple’s drop in sales has been said to be related to this trend, since the company is currently at the end of its product cycle. Come this time next year, Apple could get a major boost to its sales, especially with the introduction of the iPhone 7.
But that’s just one of the issues Apple is facing. The most significant barrier preventing Apple from reaching higher sales is product saturation in the United States. Apple attempted to reach out to other large markets, such as India, but because the price of an iPhone is relatively steep, Indian consumers prefer to purchase cheaper options. Apple’s sales in China have also dropped 33 percent. Europe remains the most unscathed region for Apple, with just a 7 percent drop in sales.
On the bright side, Apple’s revenue decline wasn’t as bad as Wall Street has expected after the unoptimistic outlook Apple had laid out in March. Apple shares rose about 7 percent in after-hours trading, according to NY Times.
“The valuations had been driven down based on expectations of no growth,” said Walter Pieck, analyst with BTIG Research. “Now investors can start focusing on what they’re going to say in September about the new products.”
Luca Maestri, Apple’s chief financial officer, said during an interview that the company’s dope in sales seems worse than it actually is because Apple held back on shipments to retailers in China and other countries so that stores could clear out their existing stock to make way for new stock to be introduced later in the year. Because of this, Maestri pointed out that iPhone sales were down 8 percent.
Wall Street’s new prediction for Apple is that sales will pick up at the end of the year, meaning the next quarter will still be low, but the quarter after that will show more promising results. Apple CEO Tim Cook suggested that Apple TV could be the basis for substantial innovation. Apple is said to be increasing R&D spending, which is a sure sign of new products to come in down the line.