Mobile-phone chip-making giant Qualcomm Inc. expects a surge in smartphones sales next year as consumers flock to 5G-capable devices such as Apple Inc.’s new iPhone 12 that helped lift its latest results. Qualcomm, a leading supplier of the chips supplying 5G equipment, is projecting shipments of 450 million to 550 million 5G smartphones in 2021, at least double the expected total this year.

Handset sales were the big driver of the company’s earnings in the latest quarter, Chief Executive Steve Mollenkopf said, adding that Qualcomm also is seeing benefits from other kinds of devices using its 5G chips. They included internet-of-things devices and networking gear, he told analysts Wednesday. Stock in Qualcomm is climbing steadily after the company said it was going to sell millions of chips for 5G mobile devices as people upgrade their phones.

That implies hundreds of millions more dollars of revenue more than investors had expected. Qualcomm stock surged more than 10% in the after-hours session on Wednesday, after closing up 2.8% to $128.97. “Our fiscal fourth-quarter results demonstrate that our investments in 5G are coming to fruition and showing benefits in our licensing and product businesses,” Qualcomm CEO Steve Mollenkopf said.

The chip maker, known for its wireless communication chips for smartphones, reported fiscal fourth-quarter net income of $2.96 billion, which amounts to $2.58 a share, compared with a net profit of $506 million, or 42 cents a share, a year ago.

The strong earnings come as Qualcomm emerges from several years of legal challenges over how it licenses patents on key telecommunications technologies, which some competitors and regulators have called unfair. Apple and the Federal Trade Commission both sued Qualcomm in 2017, alleging it leveraged its position as a crucial chip supplier to get more favorable terms on its licenses.

If the talks lead to a partnership, it would put Comcast in a crowded marketplace dominated by players like Amazon, Apple and Roku where it’s late to join the fray — but that might not be a problem. It could allow the company to extend the reach of X1 and platforms like Flex, outside of the regional markets where it offers cable TV. More importantly, it would be another way for Comcast to grow Peacock’s streaming subscriber base without having to depend deals with companies like Roku for support.

For Walmart, meanwhile, the deal would mean more value-priced TVs to put on shelves, with Comcast providing support and software. It also would not be the first time Walmart has entered into an agreement of this type; Walmart and Roku have something of a similar deal in place with several Onn-branded TVs and soundbars that run Roku OS.

Todd Horwitz Chief Strategist BubbaTrading.com
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