The company’s shares fell 2% in extended trading and Qualcomm also cut its full-year revenue and profit forecast for the second time, reports Reuters.

Net income fell to $1.05bn, down from $1.96bn in the same quarter last year (January 1 to March 29).

Loss of crucial design wins, licensing issues

Qualcomm lost Samsung, one of its key customers, which is now using its in-house Exynos processors on the Galaxy S6 series.The company is facing strong competition in other markets as well, courtesy of MediaTek, and possibly Intel in the latter half of the year. 

However, the biggest issue had nothing to do with chip sales. The company was also forced to pay a $975m fine in China, following an investigation into anti-competitive business practices. The fine was paid in Q1 and obviously had quite an impact on the earnings report. Qualcomm is sitting on a vast hoard of cash, so it can afford to pay the fine in a single quarter. 

Qualcomm now estimates its full year revenue will end up in the $25-$27bn range, down from its previous forecast of $26.3-$28bn.

Moving forward

Qualcomm still has a strong product roadmap, but this time around so do its competitors. This wasn't the case last year, or in 2013, when Qualcomm dominated the high-end space, virtually uncontested. The loss of Samsung’s Galaxy S6 is a big hit, but the Snapdragon 810 has managed to score a number of high-profile design wins over the past couple of months.

In mid-range and entry-level markets, the company is facing intense pressure from MediaTek and even some smaller SoC makers. Intel’s first SoFIA parts are expected to ship in mid-2015 and could make the entry-level space even more crowded, putting additional pressure on Qualcomm and MediaTek.