Qualcomm warns that fewer people are going to buy new phones in the last two months of the year even as the holidays are fast approaching.

The giant chip and modem maker, which provides tech giants like Apple and Samsung, made its latest prediction during its recent earnings release.

(Photo : Justin Sullivan/Getty Images)
CUPERTINO, CA - SEPTEMBER 12: Visitors inspect the new iPhone XR during an Apple special event at the Steve Jobs Theatre on September 12, 2018 in Cupertino, California. Apple released three new versions of the iPhone and an update Apple Watch.

Qualcomm Warns Against Massive Drop in New Phone Sales

As per the latest story by The Verge, Qualcomm predicts that phone sales are likely to see a low double-digit percentage decline.

The news outlet notes that the chip maker initially foresees a mid-single-digit drop in new smartphone sales. But this time, it warns that fewer people will be getting their hands on new smartphones.

Qualcomm reports that it plans on "updating [its] guidance for the calendar year 2022 3G/4G/5G handset volumes from a year-over-year mid-single-digit percentage decline to a low double-digit percentage decline."

The modem maker notes that it is due to the "uncertainty caused by the macroeconomic environment."

(Photo : Justin Sullivan/Getty Images)
Qualcomm CEO Steve Mollenkopf speaks during a press event at the Mandalay Bay Convention Center for the 2014 International CES on January 6, 2014 in Las Vegas, Nevada.

So it turns out that even as the holidays are fast approaching, phone makers would have a difficult time emptying their shelves.

According to a recent report by Reuters, other chip makers, such as Micron Technology and Texas Instruments, have also predicted that electronic firms are likely to experience a massive drop in demand.

Meanwhile, Reuters highlights that an IDC analyst, Nabila Popal, says that the demand for smartphones is most likely to recover in late next year or the second half of 2023.

Popal further told Reuters that while the demand significantly dropped globally, it is much worse in China and other emerging markets. She disclosed that "this is what's actually pulling [down] the smartphone market the most."

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Qualcomm Explains Increased Inventory of Phones These Days

The Verge reports that Qualcomm also revealed that its largest customers are now seeing increased inventory.

The giant chip maker blames two things that have led to this. It says that the "easing of supply constraints" is one of the reasons for the increased inventory of phone makers. Not to mention that the "rapid deterioration in demand" also affects them.

The Verge assumes that the "largest customers" of the renowned chip maker include two of the most prominent phone makers, Apple and Samsung.

The online media outlet highlights that both tech giants are grappling with less demand lately. For instance, Apple stopped increasing the production of its all-new iPhone 14 series.

Related Article: Apple to Continue Using Qualcomm 5G Modems for iPhone 15-Not Developing Own Chips

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Written by Teejay Boris