As Apple moves forward with its transition to using its own modem chips, thus ending a long-standing partnership with Qualcomm, the CEO of Qualcomm, Cristiano Amon, has openly discussed life beyond Apple.
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The End of a Profitable Partnership
During an appearance on Yahoo Finance’s podcast “Opening Bid,” Cristiano Amon expressed that Qualcomm has accepted the inevitable: “We are planning our business as if Apple will use its own modem,” confirming that the tech giant from Cupertino is determined to move away from Qualcomm’s network chips in the coming years.
The current licensing agreement between the two companies will continue until 2027. In the meantime, the shift is already well underway: Qualcomm expects its modems to be used in about 70% of iPhones this year, but that number is projected to drop to 20% by 2026, and then to zero with the 2027 iPhone generation.
With annual revenues estimated between $5.7 and $5.9 billion from this partnership, the gradual separation might seem concerning. However, Amon remains calm: “there’s a lot of drama surrounding the relationship with Apple, which I think is unwarranted.”
Focusing on Android, Automotive, and Artificial Intelligence
To reassure the markets, Qualcomm is highlighting its diversification strategy. The CEO emphasizes that “what’s exciting about our company is all the growth we are creating… including on Android.” Qualcomm continues to be a key player in the Android market, but it is particularly in automotive, IoT, and data centers that the company sees its future growth engines.
After an initial setback in server chips, the company is making a comeback with a new ambition: to position itself in the semiconductor market optimized for AI, aiming to complement Nvidia’s dominant GPUs.
However, Qualcomm is not alone in this highly sought-after niche. AMD, Intel, and ARM are also developing solutions to leverage the artificial intelligence boom. For Cristiano Amon, the market is large enough for everyone, and particularly for a disruptive new player like them: “The total market is big enough for a disruptive player like us to thrive.”