Qualcomm reported Q3 sales of $10.37 billion, exceeding analyst estimates

On Wednesday, Qualcomm, the world’s largest supplier of modem chips, shared an optimistic quarterly forecast, reporting a 10% year-on-year revenue increase for its fiscal third quarter with chip segment sales at $10.37 billion, just barely surpassing the estimates of analysts which was $10.35 billion. 

Unfortunately, the company’s dependence on high-end smartphone chips and the impending loss of Apple as a modem customer have overshadowed these positive forecasts, causing a share price drop of over 6%.

Apple is taking its business in-house

Apple has up to now been a key client of Qualcomm’s. However, that has changed because the gadget company has decided to pivot to its own in-house modem chips, leaving Qualcomm to supply only 20% of Apple’s modem chips by 2026.

Even though Apple is taking a step back from the partnership, Qualcomm has reported that its chip segment has seen sales increase.

However,  William McGonigle, analyst at Third Bridge, has said the increase can mostly be attributed to non-Apple customers and is largely driven by ASP (average selling price) uplift from flagship Android launches rather than broad-based volume recovery.

Cryptopolitan reported earlier that Qualcomm has continued to warn that Apple’s pivot to using its own modem chips in its devices will affect its chip segment revenue. Even though Apple is not ready to make a full pivot, it has already started the process.

The iPhone 16e, which launched earlier this year, was the first Apple smartphone to house a modem developed in-house and future devices are expected to be the same.

Losing all the revenue that came from supplying Apple is a bummer for Qualcomm, but the company’s CEO Cristiano Amon is unbothered. He mentioned thathe’s already looking forward to an expansion of its deal to supply chip for augmented-reality glasses for brands like Meta.

“We have all the designs that matter right now – the number of designs like the Meta glasses is now up to 19, and that continues to accelerate,” Amon told Reuters.

Taiwan’s Mediatek is becoming a bigger rival to Qualcomm

According to reports, Taiwan’s MediaTek surpassed Qualcomm this year to become the global leader in smartphone chipset market share, thanks to its dominance in affordable and mid-range segments as well as its strong growth in major markets like India.

Last month, the MediaTek Dimensity 8450 was officially launched with the ultimate aim of increasing MediaTek’s share in India’s premium smartphone market.

The new chipset was reportedly designed as a direct competitor of Qualcomm’s Snapdragon 8s Gen 4, and boasts an All Big Core design, advanced AI capabilities with MediaTek’s Agentic AI Engine, and enhanced gaming performance, including improved 4K video recording.

The Dimensity 8450 also comes complete with an 8-core CPU, Arm Mali-G720 MC7 GPU, and supports 4K60 HDR video capture, while the Snapdragon 8s Gen 4 includes a mix of performance and efficiency cores with an Adreno GPU.

The launch is proof that while MediaTek has a strong presence in the sub-Rs 30,000 smartphone segment, it has set ambitious sights on expanding its influence in the premium market which is traditionally dominated by Qualcomm with its strong Android partnerships.

While MediaTek’s volume leadership is commendable, it is yet to translate to revenue dominance, so as it stands, Qualcomm retains its premium market edge.

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