Due to lower-than-expected demand for high-end 5G smartphones, Qualcomm has significantly reduced the price of mid-range 5G chips, according to the latest report by Tianfeng International analyst Ming-Chi Kuo.
The report said that the demand for high-end 5G mobile phone replacement is lower than the expectations of Android brand manufacturers. Qualcomm's move is to improve the 5G chip shipment momentum and increase the demand for replacement.
According to the report, Qualcomm has significantly reduced the price of the 5G chip SD 765 (SM7250) by about 25-30% to $ 40, which is significantly lower than the price of MediaTek's 5G chip Dimensity 1000 at $60-70 (cost of about $45-50).
The report also expects that MediaTek ’s major 5G chip brand customers (including OPPO, vivo and Xiaomi) will transfer a total of about 20-25 million chip orders from MediaTek to Qualcomm, and this order transfer will begin as soon as February.
The report states that the price war on 5G chips will begin 3-6 months earlier than the market expects, but Qualcomm will continue its price reduction strategy and increase shipments to offset the decline in prices to maintain overall profits; MediaTek's price pressure will continue to increase, and 5G chips Gross margin is likely to be below 30–35%.
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