Qualcomm set for battle over electronic chips

Qualcomm Inc, the world's most valued semiconductor company, is preparing for more intense competition in China in 2013 as the country becomes the world's largest smartphone market, company Chairman and CEO Paul Jacobs said on Tuesday.

He added that Intel Corp "has potential to be a big competitor" in the long run, but it will have a limited effect on Qualcomm's business this year.

Chinese customers have the most diversified requirements for smartphones in areas such as online entertainment and social networking, according to the CEO.

The biggest challenge for Qualcomm is to continue to bring down the cost of making chips while increasing new features to meet the diversified needs of Chinese customers, he said.

China became Qualcomm's largest market in terms of revenue in fiscal year 2011. The market contributed more than one-third of the company's revenues.

The research company International Data Corp predicted that the shipment of smartphones in China could hit 300 million in 2013, an increase of 44 percent year-on-year. It added that the total number of smartphone users in China may reach 500 million.

Qualcomm said it had shipped about 500 million mobile chips in 2012, but did not disclose sales in the Chinese market.

Local smartphone makers, including ZTE Corp, Lenovo Group and Huawei Technologies Co, are rolling out devices using chips made by the US company.

"China's smartphone market grew significantly in volume in 2012 and it will directly benefit Qualcomm, which owns a large customer base in the country," according to Nicole Peng, research director at IT research company Canalys China. She added China is expected to contribute higher revenues for Qualcomm.

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