Qualcomm said it expects chip sales to iPhone maker Apple to drop in the coming years but predicted brisk growth in chips for autonomous cars and other connected devices.
Qualcomm supplies all of the modem chips that connect Apple’s devices to mobile data networks, but Apple is working on its own modem chips.
Qualcomm executives said they expect to supply only 20 percent of Apple’s modem chips by the launch of the iPhone in 2023. Qualcomm Chief Financial Officer Akash Palkhiwala expects Apple to make up a low single-digit percentage of the company’s chip sales by the end of fiscal 2024.
Apple losses will be more than offset by gains in other fields, Qualcomm said.
Three-year financial targets
# QCT revenues to grow at mid-teens CAGR with 30%+ operating margin by fiscal 2024
# Handset and RF front-end revenues grow at least in-line with a 12% SAM CAGR by fiscal 2024
# Automotive revenues grow to ~$3.5 billion in five years and ~$8 billion in 10 years
# IoT revenues grow up to $9 billion in fiscal 2024
# QTL expected to maintain its current revenue scale and margin profile
Qualcomm expects revenue from the automotive sector, where sales were just under $1 billion in fiscal 2021, to reach $3.5 billion in five years and $8 billion in 10 years. Earlier on Tuesday, Qualcomm landed a deal to sell self-driving car chips to German automaker BMW.
The company said it expects $9 billion in revenue from its internet of things unit that supplies such devices, an 80 percent increase from the $5 billion for the unit in fiscal 2021. Growth in that segment will also come from virtual reality headsets such as Meta Platforms’ Oculus Quest 2, which uses a Qualcomm chip and which has sold 10 million units.
Qualcomm CEO Cristiano Amon said Qualcomm sells Apple radio-frequency front-end chips that are paired with modem chips. Qualcomm will have a future chance to compete to sell those chips to Apple regardless of where Apple sources its modem chips.