The price of Qualcomm 5G chips began to be reduced due to overestimating the demand for 5G replacement

ByAlie Iwasaki 2020-01-15 1520

Previous data show that the mobile phone market is now saturated, and everyone's demand for replacement is not very high. The emergence of 5G mobile phones is likely to cause a new round of replacement craze. However, on January 14, Tianfeng International Guo Mingyi released a report that Qualcomm had significantly reduced the price of intermediate 5G chips to increase demand for 5G phones due to lower-than-expected demand for high-end 5G phones. And he predicts that the mobile phone manufacturers that originally worked with MediaTek are likely to turn to Qualcomm, so MediaTek will face great price pressure.

 
Qualcomm Snapdragon865 mobile platform

Qualcomm has significantly reduced the price of 5G chip Snapdragon765 by about 25%, 30%, to $40, to $40, significantly lower than MediaTek's 5G chip Phecda1000, which costs about $4550, because the replacement demand for high-end 5G phones is lower than Android-branded manufacturers' expectations, Qualcomm has significantly reduced the price of 5G chip Phecda1000 by about 25% 30% to $40, which is significantly lower than MediaTek's 5G chip Phecda1000, which costs about $4550. As a result, Guo Mingyi predicts that the major 5G chip brand customers working with MediaTek, including OPPO, Vivo and Xiaomi, will transfer a total of about 2000-25 million chip orders to Qualcomm. The transfer of this order will begin in February at the earliest.

 

The report said that the reduction in the price of Snapdragon765 will have a greater negative impact on MediaTek's expected Phecda800 chip to be released in mid-to-late May, and the transfer effect will continue. MediaTek will face greater cost pressure and profits will be lower than market expectations. The price war on 5G chips begins six months earlier than expected, but Qualcomm will continue its price reduction strategy and offset the decline in prices with increased shipments to maintain overall profits; the price pressure on MediaTek will continue to rise, and the gross profit margin of 5G chips may be lower than 30 percent.


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