Qualcomm warns that ‘uncertainty’ about coronavirus could hit the smartphone industry

The world’s biggest maker of smartphone chips and modems is warning that the coronavirus could disrupt the global mobile industry.

Qualcomm said on Wednesday that it has lowered its earnings guidance for next quarter in part due to the virus outbreak in China. “There is significant uncertainty around the impact from the coronavirus on handset demand and supply chain,” the company’s chief financial officer, Akash Palkhiwala, said during its latest earnings call.

The coronavirus has killed more than 560 people and infected over 28,000 people worldwide — most of them in China. The outbreak has already had a major impact on global business, with retailers shutting down hundreds of stores, airlines canceling flights to and from China and crude oil entering a bear market earlier this week.

And the smartphone industry, which is hugely dependent on China for both manufacturing and sales, is likely to take a big hit. Nearly half of Qualcomm’s revenue last year came from China, according to the company’s latest annual report, and several of its customers including Apple have a major presence in China.

“As the coronavirus situation continues to unfold, our thoughts are with the many Qualcomm employees in China, our customers and suppliers, their families, as well as those who are impacted by this unprecedented situation,” Qualcomm CEO Steve Mollenkopf said Wednesday.

The chipmaker reported revenues of $5.08 billion for the quarter ended December 2019 — a 5% increase from the same period last year — while its profit fell 13%.

Qualcomm stock was down nearly 2% in after-hours trading.