Qualcomm the chip and electronic component company, was quick on its feet this morning, as management tried to stomp out rumors that its new Snapdragon 810 processor is susceptible to overheating if used for extended periods of time. “I heard there was concern about Snapdragon 810 overheats since last year. But I think there can be some issues at [the] development stage and also that [those] kind of issues can be overcome by great engineers who never give up,” said Qualcomm’s management in a statement. Currently, the Snapdragon 810 chips can be found in Microsoft, Motorola, Sony, and Xiaomi mobile devices.
Corporate customers are rejecting 810, using weaker chips
Qualcomm’s corporate clients are clearly distraught on the prospect of the advanced 810 chips overheating and possibly creating a new source of headaches. One of best examples is that of LG and the company’s production of its flagship phone, G4. LG still went with Qualcomm chips in its highly anticipated phone, but LG actually opted to use the weaker, older Snapdragon 808 chips, dealing another blow to Qualcomm’s 810. Another example involved Samsung approaching Qualcomm for chip components for new Galaxy S6. However, Samsung later pulled out of negotiations all together and later decided to go with Samsung chips instead of Qualcomm.
Qualcomm profits dropped 46% year over year during the second quarter
Qualcomm released second quarter earnings results on April 22. The company reported earnings per share of $1.40 on revenue of $6.9 billion. Analysts polled were looking for earnings per share of $1.33 on revenue of $6.83 billion. While Qualcomm barely beat analyst estimates, profits dropped 46% from second quarter 2014 after being snubbed for supplying the new Galaxy S6 and a $975 million fine paid to Chinese regulators who accused the company of antitrust issues.
Overall, Qualcomm has had a rough go at it recently. Shares are down over -8.5% year to date and the company’s top chip processor is undesirable to corporate clients. Despite the fact that Qualcomm is developing a Snapdragon 820 chip, it still remains to be seen whether corporations are willing to trust Qualcomm again and their chips.