Qualcomm has failed at the Wall Street due to their recent financial report. The company however said that Huawei is hugely responsible for their failure. Qualcomm, a chipmaker company based in U.S said that their revenue in the first quarter has fallen by 13%. In fact, even the net income has been down by 34%. Besides, guidance in September quarter is also below expectations. In the press release, Qualcomm commented that these days 4G devices are in less demand because the market is getting ready for the launch of 5G. This is also the reason behind declining results. However, high ranked executive of the firm directly accused Huawei and China as huge factors behind the failure.
Qualcomm CEO, Steve Mollenkopf said on July 31, 2019, that there was a ban on exports to the Huawei. Along with that the transition from 4G to 5G has increased in past few months which have led to decline in the sale in the industry. The condition is in fact worse in China. However, Qualcomm is confident that they would be able to stabilize situation in next two quarters. Due to the export ban put on Huawei, they changed their focus to developing market share throughout the domestic market. There the benefit of products or licensing revenue is hardly of any use to Qualcomm.
Huawei was put under a blacklist throughout U.S which forbade American companies to sell products to them. Huawei highly depends on American firms for providing components for their laptops and smartphones. Later, Trump administration lifted the ban and allowed U.S companies to continue selling products to Huawei as long as it does not pose any threat to national security. Huawei had to shift their motive of developing business in China and in their 2nd quarter, there were a total of 62% shipments. In their second quarter, Huawei became the largest smartphone buyer in China.