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Qualcomm's AI Push: Replacing Apple Revenue?
5 Nov
Summary
- Smartphone chip revenue declined 26% due to sluggish demand.
- Qualcomm expects non-handset business to replace Apple entirely.
- Company signed a multi-year 5G deal with SpaceX for Starlink.
Qualcomm experienced a notable downturn in its smartphone chip revenue, which decreased by 26% in the fourth quarter. This decline was primarily attributed to a broader slump in global smartphone shipments, which reached a 14-year low in the September quarter. However, the company's CEO indicated a sequential growth in Android handset sales and emphasized the company's proactive preparation for market shifts.
Strategically, Qualcomm is heavily investing in its non-handset business, particularly in AI chips. The company anticipates this sector will entirely offset the revenue loss from Apple, which is transitioning to its own modem chips. Qualcomm has secured significant agreements with hyperscalers like Amazon, Microsoft, and Meta Platforms for AI chips and data-center products.
Further diversifying its portfolio, Qualcomm recently entered a multi-year 5G agreement with SpaceX to supply its Starlink Mobile network. The company projects strong growth in its non-handset revenue, aiming for a 60% year-over-year increase by fiscal year 2027, even with Apple's business excluded from future forecasts.
