systems
But AI has come along just in time to cover being dumped by Apple
Qualcomm has predicted its entry to the datacenter market will yield $15 billion of annual revenue by FY 2029 – huge growth, but also a modest number compared to its more established rivals.The chip design firm dangled the $15 billion figure on Wednesday along with its Q3 results, which included a warning that revenue from its business selling modems to Apple is about to crater.Execs told investors that supply chain constraints mean Qualcomm expects “an acceleration in the step down of Apple product revenues” as its contribution to the next iPhone “is expected to be materially lower than our prior estimate of 20 percent.” Apple has spent years working on its own modems, a shift Qualcomm has long acknowledged. Now the House of the Snapdragon has advised investors to expect less than $2 billion in sales to Cupertino next year.
“This obviously accelerates kind of the exit of Apple revenue out of our model,” said CFO Akash Palkhiwala.
Qualcomm has a plan to replace Apple’s cash, by diversifying away from smartphones. Execs said the company thinks it will sell $40 billion a year of products not tied to handsets in FY 2029, with $10 billion of automotive sales and revenue from internet of things devices hitting $14 billion. The company sold $3.3 billion on non-smartphone kit in Q3 and previously forecast $22 billion of non-phone revenue in 2029.Growing its datacenter business from zero to $15 billion in a few years is impressive, but it’s worth comparing Qualcomm’s plans to current results from its rivals like AMD and Intel, both of which won over $16 billion in datacenter revenue in FY 25 and are growing fast. And then there’s Nvidia, which is on track to post over $250 billion annual datacenter revenue.
