There’s a difficult market ahead for smartphones

Ahead of quarterly results from smartphone-related companies later this week, including Apple (AAPL), Qorvo (QRVO) and Bullpen resident Qualcomm (QCOM), NXP Semiconductor (NXPI) said during its earnings conference call this morning that its December quarter mobile revenue rose 9% year over year, but was below its expected revenue growth range due to weakness in the Android handset market.

This echoes comments from Samsung (SSNLF) earlier this morning and suggests potentially weaker than expected growth for other RF semiconductor companies, including Qorvo, Qualcomm, and Skyworks (SWKS).

Not only did Apple (AAPL) gain share in the December quarter in a declining market, it did so principally against Android powered devices. Parsing 4Q 2022 smartphone shipment estimates from IDC, we find that while Apple’s expected shipments fell just shy of 15% year over year, as the overall Android market dropped more than 13%.

Similar to other companies including Micron (MU), Taiwan Semiconductor (TSM) and Samsung, NXP also sees a difficult market ahead for its mobile business. For the current quarter NXP is forecasting that business to be down 40% both quarter over quarter and year over year.

When asked if the June quarter is the potential inflection point for that business, NXP management shared it can’t predict that with any degree of certainty.

We’ll look to see what Qorvo says later this week, but that points to similar challenges ahead for the smartphone RF business, barring any dramatic pullback, and odds are QCOM shares may remain in the Bullpen for a while longer. Action Alerts PLUS