Qualcomm: The percentage of Apple’s chip business will drop to single digits in 2024

Qualcomm shares closed up 7.9% on Tuesday, after Qualcomm issued a bullish forecast at an investor conference.

At the investor conference on November 16, Qualcomm announced that it will continue to expand its semiconductor business to meet the growing opportunities brought about by the demand for its technology.

At the same time, Qualcomm said its growth does not depend on its relationship with any single customer, such as selling modem chips to Apple.

An Meng, President and CEO of Qualcomm, said at the meeting: “Qualcomm is ushering in the biggest development opportunity in its history to help empower a world of intelligent interconnection of all things. Qualcomm has unique advantages. In addition to smartphones, we also Business growth will be achieved in many areas. Our business is rapidly diversifying, not relying on a single industry or a single customer.”

Qualcomm currently provides wireless chips for Apple devices, but said it expects to provide only 20% of the modem chips required by the iPhone in 2023. According to Qualcomm’s report, total chip sales in 2021 will be $27 billion. However, company executives refused to disclose the current percentage of Apple’s revenue in the company’s total revenue.

Qualcomm said that by 2024, its entire chip business called QCT will grow by at least 12%. At the same time, Qualcomm also predicts that by the end of 2024, the proportion of its business with Apple in its chip business will drop to a “single-digit” percentage, and this number will be extremely low.

This means that the growth of Qualcomm’s chip business is no longer closely linked to the “Qualcomm & Apple cooperation”.

“As we continue to invest in leading RF front-end technology, there is an opportunity to supply it to Apple. But as far as Apple is concerned, we will not make any assumptions other than the assumptions in the plan. Regarding everything about Apple, we should consider its positive aspects. “An Meng said.

At the scene, Apple representatives did not comment on Qualcomm’s plans.

As early as 2019, Apple acquired Intel’s modem business and is currently developing its own wireless 5G technology, but has not yet publicly discussed its modem plan.

Qualcomm Chief Financial Officer Akash Palkhiwala (Akash Palkhiwala) said that Qualcomm’s main strategy in the field of mobile phones is to provide power for high-end Android devices.

Qualcomm: The percentage of Apple’s chip business will drop to single digits in 2024

As the Qualcomm Investor Day arrives, analysts have been tracking all aspects of Qualcomm and Apple’s actions.

Bernstein analyst Stacy Rasgon (Stacy Rasgon) wrote in a note on Monday: “Apple’s potential to eventually internalize its own chipset is still full of suspense. I believe many investors are also looking for it. Some kind of clear answer, they might underwrite the profitability level without Apple chips.”

Although Qualcomm is well-known as a supplier of wireless chips and processors for mobile phones, Qualcomm’s business has been diversified. Currently, more than one-third of its sales are driven by other types of devices (such as PCs, cars, and virtual reality headsets). Chip produced.

This can be reflected in the “new financial goals for the next three fiscal years” set by Qualcomm at the investor conference.

● By the 2024 fiscal year, QCT’s semiconductor business revenue will achieve a mid-teens compound annual growth rate, and the operating profit margin will exceed 30%

– By fiscal year 2024, the growth rate of smartphone and RF front-end business revenue will be at least the same as the 12% compound annual growth rate of the serviceable market (SAM)

– The annual revenue of the automotive business will grow to 3.5 billion U.S. dollars in the next 5 years and to 8 billion U.S. dollars in the next 10 years

– In fiscal year 2024, the annual revenue of the Internet of Things business will increase to 9 billion US dollars

● QTL technology licensing business is expected to maintain the current revenue scale and profit level

In addition, Qualcomm also said that although its 2021 car business sales are less than US$1 billion, sales in the next 10 years may reach US$8 billion, and part of the sales will be realized through the cooperation between Qualcomm and BMW.

Qualcomm introduced the latest cutting-edge driver assistance technology and the Snapdragon Ride™ platform to the BMW Group’s next-generation advanced driver assistance system (ADAS) and autonomous driving (AD) platform. BMW’s next-generation autonomous driving software stack will be based on the Snapdragon Ride vision system-on-chip (SoC), visual perception, and the ADAS central computing SoC controller managed by Qualcomm’s cloud service platform.

In short, Qualcomm will provide chips for BMW’s self-driving cars.

Talking about the cooperation between the two parties, Anmeng said: “The cooperation between Qualcomm and BMW Group has opened a new era in the automotive field. As a leading technology company, the two parties will jointly design and develop the key elements of the Snapdragon™ digital chassis, and empower A generation of cars. We are proud of this milestone cooperation and look forward to the products that the two parties have worked together to land as soon as possible.”

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