Saul (or anyone else that may have an informed opinion on the subject),
A week or two ago there was some discussion on SWKS’ new SkyBlue technology. Does anyone know if this was the reason for their optimism about potential significant growth in the 2nd half of 2016? They alluded to the 2nd half of the year going to be a very strong one for them, does anyone think the SkyBlue tech is why?
Thanks for any insights.
foodles, my guess is that SkyBlue is a large component of that optimism but not the sole reason.
Keep in mind that Skyworks plans for future products by working closely with their clients to determine future needs. This close integration with their customers is what gives Skyworks the ability to provide such complex high quality solutions perfectly suited to future demand. When developing SkyBlue they probably already had at least one customer long before the public announcement.
Skyworks likely also can predict how cell phone release cycles effect their own sales. The timing is about right for them to be optimistic about how upcoming mobile device product releases will effect their own sales, no matter if they use SkyBlue or not.
A week or two ago there was some discussion on SWKS’ new SkyBlue technology. Does anyone know if this was the reason for their optimism about potential significant growth in the 2nd half of 2016? They alluded to the 2nd half of the year going to be a very strong one for them, does anyone think the SkyBlue tech is why?
March quarter is going to be weak due to iPhone. This has been announced. Management has great visibility into expected revenue because SWKS works on designs for their customers up to 2 years in advance. The second half is “going to be strong” because management knows which companies are launching products in the 2nd half of 2016 and because they are already designed into those products. Of course, SWKS revenue will be contingent on how well their customers’ products sell in the market.
Chris
Of course, SWKS revenue will be contingent on how well their customers’
products sell in the market.
That’s true to some extent, but I tend to look at it a little differently. If Apple or Samsung are coming out with a new flagship device (or multiple devices), chances are they have a pretty good idea how many they need to make in order to meet that expected demand. So they have to go ahead and buy nn of those parts from needed to make those devices from their suppliers, and that has to happen in advance of the product build, much less the launch, right?
So – unless the contracts with SWKS are structured in such a way that SWKS only gets a commission or percentage, or is paid based on what actually ships or sells – I think the contingency part is less than that sentence may imply. To suppliers and integrators like Skyworks, I think it may be more “known” to them than they are allowed to define, but enough that they can make forward-looking positive commentary.
So if Apple thinks it will ship 80 trillion FruitPhone 2016’s, then I presume Skyworks gets paid up front(-ish) for 80 trillion of whatever SWKS componentry is required to build the FruitPhone 2016. And since that probably happens many quarters in advance, Skyworks can say they’re going to see an uptick (or dip) in revenue or profit or whatever in Qx.
Just my thought anyway. Feel free to debate it. I like a good debate. 