Mobile chipmaker Qualcomm gave a more conservative five-year outlook than in the past as it faces an antitrust probe in China and more consumers there and in other developing countries buy lower-priced smartphones.
China’s expanding high-speed 4G network is driving demand for smartphones with leading-edge technology, but Qualcomm’s opportunities have been clouded by a year-old antitrust investigation there and troubles collecting royalty payments from device makers.
The company expects to grow its revenue between 8 percent and 10 percent annually over the next five years and its earning per share even more. In the past, Qualcomm has targeted double-digit annual growth in revenue and EPS over five years.
Chief Executive Steve Mollenkopf told analysts on Wednesday at the company’s annual investor day that Qualcomm’s troubles in China were hurting its royalty business, called QTL, which provides most of the company’s profits.
“On QTL the short story is that the underlying market continues to grow,” Mollenkopf said. “We are not participating in it right now to the degree we would like to, but once we resolve China we think we’ll continue to grow in that area.”
Mollenkopf also said Qualcomm is developing low-power chips for data centers, a market dominated by Intel.
Qualcomm’s overall revenue grew 6.5 percent in fiscal 2014, far below growth rates of around 30 percent in recent years. Analyst expect 5 percent revenue growth for 2015, according to Thomson Reuters.
Also on Wednesday, Qualcomm said its fifth-generation LTE modem chip, with improved upload and download speeds, was being tested by customers and would likely be commercially available next year.
Qualcomm’s stock was down 1.68 percent at $70.79.
(Reporting by Noel Randewich; Editing by Phil Berlowitz)
This article originally appeared on Recode.net.