Why Is the Smartphone Market Not Recovering? Qualcomm CEO Blames High Memory Prices

Bloomberg reported on Thursday (30th) that Qualcomm (QCOM-US) CEO Cristiano Amon stated that consumer demand for smartphones remains strong, but rising memory prices and supply shortages are driving up device manufacturing costs, potentially prolonging the smartphone market's downturn in the short term.

During an interview with Bloomberg Television, Amon emphasized that the market does not lack upgrade demand. Instead, he pointed to memory pricing and supply issues as the real barriers to sales growth. He noted that consumers still want to buy smartphones, but with component costs remaining high, manufacturers may face margin pressure, and some of these costs could be passed on to consumers. As a result, he expects the overall market to remain sluggish for the foreseeable future.

Amon's comments come shortly after Qualcomm issued a disappointing financial outlook. The company projected that its profit for the quarter ending in September would fall below analyst expectations, further fueling investor concerns about near-term growth and cost pressures.

Qualcomm is one of the world's leading smartphone processor suppliers. However, the company forecasts that revenue from Android smartphones will decline by approximately 20% in the current fiscal year, reflecting ongoing challenges in the smartphone market's recovery. Rising memory costs, chip supply constraints, and major customers adjusting their product strategies could all impact Qualcomm's business performance.

Market attention now turns to Apple (AAPL-US), which is set to release its earnings report after the market close on Thursday. The iPhone accounts for about half of Apple's total revenue, but in recent years, Apple has been reducing its reliance on Qualcomm components, shifting instead to its own in-house developed chips. This transition adds further pressure on Qualcomm as its business with Apple continues to shrink.