Qualcomm faces revenue shifts as Apple develops in-house modems

Qualcomm is facing significant shifts in its business model as its major customer, Apple, moves toward developing in-house mobile modems. Between April and June, Qualcomm's smartphone chip revenue dropped by approximately 20% due to Apple integrating its own wireless chips into its devices.

Despite this decline, Qualcomm reported a quarterly revenue of 8.5 billion euros, supported by its licensing division (QTL). This division, while accounting for only 13% of revenue, maintains a high operating margin of about 72%. Qualcomm's licensing fees are calculated based on the total retail price of a smartphone, rather than just the cost of the chip, capped at approximately 344 euros.

Reports regarding the upcoming iPhone 18 Pro Max suggest a fragmented transition. While Apple is increasingly using its proprietary C2 modem globally, the US version of the iPhone 18 Pro Max appears to still utilize a Qualcomm modem, potentially the Snapdragon X85. This indicates that Apple's move to replace Qualcomm hardware is not occurring uniformly across all markets.