Qualcomm Facing Challenges as Apple Shifts Away from Modem Chips
Qualcomm, a major player in smartphone chip sales, is encountering obstacles with Apple’s move away from their modem chips. The company’s optimistic forecast was overshadowed by market concerns, causing share prices to drop over 6%.
Being a key provider of modem chips enabling smartphones to connect to wireless networks, Qualcomm experienced a notable increase in chip segment revenue from non-Apple clients this fiscal year. However, the boost in sales, excluding Apple, is primarily attributed to higher average selling prices from leading Android launches rather than a broad volume recovery.
Recent data from Counterpoint Research revealed that Taiwan’s MediaTek has surpassed Qualcomm in global smartphone chipset market share, emphasizing its success in affordable and mid-range market segments.
Despite forecasting substantial revenue for the upcoming quarter, Qualcomm remains wary of the impact from Apple’s transition to in-house modem chips for future devices.
The ongoing uncertainty surrounding tariffs and trade policies, including potential sector-specific levies on semiconductors, adds complexity to the market landscape. Global smartphone shipments faced a slight increase due to accelerated deliveries by Apple to avert tariff repercussions.
Qualcomm’s CEO anticipates expanding the chip supply to innovative products like augmented-reality glasses, showcasing a growing portfolio of 19 designs, including the Meta Ray-Bans. The company’s financial performance has generally exceeded market expectations, indicating a strong position in the industry.
