As Apple persists in its lengthy separation from Qualcomm, the chip company’s CEO, Cristiano Amon, is looking past the iPhone, seeking to reassure stakeholders that the firm’s future strategies are not entirely reliant on Apple’s plans.
During a recent session on Yahoo Finance’s podcast, Amon stressed the necessity of broadening Qualcomm’s operations, diminishing the importance of its connection with Apple. He mentioned that Qualcomm is already gearing up for a scenario where Apple completely shifts to its proprietary modem within the next several years.
Amon noted, “That’s our contract, you know, and if we don’t secure a new contract, that’s the way it is. And there’s a lot of drama and connection regarding the Apple relationship, which I think is unwarranted, to be frank.” Traditionally, Qualcomm has served as Apple’s main modem provider, yielding estimated yearly revenue between $5.7 and $5.9 billion. However, the current licensing agreement is due to expire in 2027, with Qualcomm anticipating a notable reduction in its role in iPhones—projecting a fall from 70% this autumn to none by the 2027 iPhone series.
### Android and Beyond
Amon pointed out Qualcomm’s strategic transition, asserting, “We’re organizing our business under the assumption that they are going to utilize their own modem. And what’s thrilling about the company is all of this development that we’re fostering… including on Android.”
Qualcomm is not solely concentrating on smartphones but is also making important investments in automotive technology, the Internet of Things (IoT), and data centers. Following a previous endeavor to penetrate the AI market, Qualcomm has declared a renewed dedication to AI-driven server chips, aiming to establish itself as a complementary competitor to Nvidia’s leading GPUs.
The competitive arena is becoming increasingly saturated, with AMD, Intel, and ARM also pursuing similar opportunities. Nevertheless, Amon is confident that the total addressable market (TAM) is large enough to support new participants. He affirmed, “It’s an enormous TAM and will keep expanding at significantly high growth rates for decades. If we can create something distinctive and transformative, there’s space for Qualcomm.”
In conclusion, Qualcomm is strategically adjusting to lessen the ramifications of its waning relationship with Apple, concentrating on diversifying its product lines and investigating new markets to secure ongoing growth in the years ahead.
