“On Wednesday after the markets closed, Qualcomm reported earnings. Buried in Qualcomm’s results is bad news for Apple, BlackBerry and Nokia,” Nigam Arora writes for Forbes. “Qualcomm is a blue chip in the mobile technology space. As of this writing, the stock is down $3.79. The real reason behind the fall is the concern that smartphone prices are falling much faster than expectations. Of further concern is the number of new entrants in the smartphone market. Somewhat shocking was a statement by Qualcomm that some of its customers are able to launch their devices in as little as 60 days from start to launch. These customers are using Qualcomm Reference Design (QRD).”
“The 60-day time to launch is in stark contrast with the traditional time of nine months to a year.,” Arora writes. “This is real bad news for Apple. Growth is in emerging markets as the developed markets are mostly saturated. In emerging markets, disposable incomes are not high enough for the masses to afford existing Apple products. Apple has already ruled out a $99 iPhone. The indications are that Apple is hard at work on a low end phone. Nobody knows the price of the future low-end iPhone. Most of the informed speculation centers around a price in the range of $300 to $400 in contrast to the $613 average selling price of the present iPhone.”
Arora writes, “The strong inference from Qualcomm’s earnings report is that smartphone prices are falling so fast that the new low end Apple iPhone is not likely to be competitive.”
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