Q3 net profit fell 25%, starting a price increase! Qualcomm releases financial report: abandoned by Apple, Android phones not selling well.

Qualcomm has officially released its latest quarterly financial report. Due to the recent surge in storage chip prices and sluggish consumer electronics demand, global Android phone shipments have seen a significant decline. The downward pressure across the industry has directly impacted the performance of upstream chip suppliers.

The latest financial report shows that Qualcomm's total revenue for the third fiscal quarter was $9.95 billion, down 4% year-over-year. Net profit for the quarter reached $2 billion. Its core semiconductor chip business, QCT, generated quarterly revenue of $8.5 billion.

Breaking down revenue by business segment, traditional mobile phone-related business brought in $5.1 billion for the quarter, a sharp 20% decline year-over-year. IoT business revenue was $1.83 billion, growing largely in line with expectations.

The automotive electronics business line performed particularly well, with quarterly revenue hitting a record high of $1.59 billion, a 61% increase year-over-year, making it Qualcomm's fastest-growing core business segment.

The sustained downturn in the smartphone market has had a greater impact on Qualcomm's business than earlier market expectations. The company, which outsources all chip production, has publicly stated that it plans to pass on some of the rising costs from the supply chain to downstream customers. After the relevant price adjustment measures take effect, its profit margins are expected to gradually return to a healthy range.

Qualcomm CEO Cristiano Amon publicly responded that the current cost increases across the entire supply chain are not limited to memory chips but cover all core links of the upstream supply chain. To bring gross margins back to historical normal levels, Qualcomm plans to officially raise official product prices across the board starting September 1.

Amon also acknowledged that this price adjustment requires one-on-one communication and negotiation with all downstream customers. During the transition period, gross margins may experience slight short-term pressure due to the temporary mismatch between costs and pricing, and the effect will not be immediate.

Qualcomm also issued a subsequent performance warning in its earnings report, forecasting that revenue from the entire Android operating system-related mobile phone business will decline by approximately 20% in fiscal 2026.

At the same time, they specifically noted that the loss of business from Apple is progressing faster than previously expected. Apple is accelerating its self-developed baseband chip replacement process, gradually reducing the proportion of Qualcomm chips used in its products.

On a more optimistic note, Qualcomm clearly stated that mobile phone business revenue contributed by Chinese manufacturers has bottomed out in the third fiscal quarter. It is expected to return to double-digit sequential growth in the fourth fiscal quarter, becoming the core driver of Qualcomm's mobile phone business recovery.