In an interview with Reuters Wednesday, Qualcomm Chief Executive Steve Mollenkopf said that Huawei mainly won market share from Chinese mobile phone manufacturers such as millet (1810.HK), Oppo and Vivo, which are Qualcomm's main customers.
He added that Huawei's offensive has prompted other mobile phone manufacturers to cancel their planned 4G models for the rest of this year and instead focus on the 5G models to be launched early next year, which could boost Qualcomm's growth.
"To ensure market share there, Huawei is fighting hard because they can't sell products internationally," Mollenkopf said. "(Other Chinese mobile phone manufacturers) responded by saying,'Let's launch 5G as soon as possible, because there's a good opportunity there', or even saying,'Let's cancel the 4G model'."
Mollenkopf said Qualcomm would not see the benefits of the shift until early 2020, but said that the system industry appeared to be rolling out 5G in places including China, where Huawei was also a major supplier of telecommunications equipment. Kin Ngai Chan, an analyst at Summit Insights Group, said Qualcomm's outlook was to "suspend 4G before transitioning to 5G".
The impact of Huawei on Qualcomm's financial estimates highlights that, to some extent, Huawei is more like a rival than a customer to Qualcomm. Huawei, which suffered a U.S. sales ban in May, continued to buy a small amount of Qualcomm chips.
Qualcomm and Huawei are both one of the world's largest 5G technology patents, but they have long been involved in licensing disputes. Huawei has been creditworthy in terms of payments and negotiations have been slow to progress, but Mollenkopf said that no further payments were included in Qualcomm's fiscal fourth quarter forecast.
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