Qualcomm Might Lose Apple At Its Customer

 The world's largest chipmaker may lose potential business once the tech giant transition to rival chipmaker

Qualcomm Inc. shares have been tumbling at the stock market post the rumors that the world’s most valuable company, Apple Inc. is transitioning to some other supplier for getting the component that connects the iPhone to the Internet.

On Wednesday, the San Diego, Calif. firm reported its better than expected earnings –and EPS of $1.04 per share on a revenue of $5.54 billion. However the shares went down 2.5% when the company announced that it might suffer a potential business loss as the company’s prestigious client is considering entering into a contract with the rival.

Several analysts have speculated that the major client which Qualcomm is talking about is the Silicon Valley tech giant, Apple Inc. as according to Bloomberg, the world’s largest chipmaker has only two major clients; Apple and Samsung and since Samsung already has multiple suppliers therefore only Apple is left to have taken the decision of moving to another supplier.

Any switch which the tech giant made regarding the components used in the devices is likely to shake the industry. The chipmaker’s stock slumped down in after-hours trading after the CEO Steve Mollenkopf predicted the likely business loss. Cowen & Co.’s analyst Tim Arcuri along woth other analysts have projected that the Apple may be collaborating with Intel Corporation for the modem chips installed inside the iPhones.

The stock fell down to $50.80. Through Wednesday, however, the shares were up by almost 4.2%.

The CEO forecasted about the likely business loss however he did emphasize in front of analysts and the investors that the chipmaker has the potential of delivering high level profits even though the company’s customers may opt for rival suppliers.

But, the CEO couldn’t fully reassured the investors. Fund manager for Becker Capital Management –owner of Qualcomm stock –Sid Parakh said: “We think there is an element of investor expectation that they lose some business at Apple.”

A spokesman from Qualcomm stated that the company doesn’t intend to give any further insight into the matter except for what it has already told on the conference call. Moreover, Cupertino, Calif. firm didn’t comment on the matter when asked.

Several mobile phones maker generally make use of modem and processor which are usually manufactured by Qualcomm but the tech giant although does use third party manufactured modems which are the microchips used to ensure the connection of the phone to cellular networks but designs its own processors.

In other news, Apple Inc. stock has also entered bear market as the Qualcomm’s another announcement of decline in chips shipments has made the analysts to bring down their estimates of the iPhone sales.