The era of Qualcomm’s 5G modems being used in Apple devices is coming to an end, as CEO Cristiano Amon has revealed that revenue from this specific segment is entering a sharp decline. Fortunately, the Chief Executive says that he has expected that this downturn would arrive and has prepared various countermeasures, such as branching out to the datacenter market and other endeavors.
Following Qualcomm’s Q3 2026 earnings call, Amon sat down in an interview, stating that supply constraints and component availability issues across the semiconductor ecosystem will result in Qualcomm’s share of 5G modems in the iPhone 18 Pro lineup to drop well below its original target of 20 percent. Reuters reports that Apple-related revenues will slump by approximately 50 percent between the September and December quarters.
Its handset business also brought in $5.09 billion for Q3 2026, resulting in a 20 percent drop compared to the same period a year ago. These are certainly troubling times for Qualcomm, and with Apple aggressively pursuing its in-house 5G modem solutions to reduce dependency on the chipset maker, diversifying is the only option. Fortunately, the San Diego has been aggressive on this front, as Amon stated that “We kind of replaced Apple with the data center.”
Amon has targeted $5 billion in revenue from the AI datacenter market in 2027, with that figure projected to reach $15 billion by 2029. Another segment that Qualcomm will dig its teeth into is the automotive sector and the industrial Internet of Things. In the latest quarter, Qualcomm’s automotive segment delivered record revenues with 61 percent year-over-year growth, driven by strong demand for connected vehicle processors.
With the Snapdragon 8 Elite Gen 6 Pro rumored to cost upwards of $300+ and with Qualcomm introducing a double-digit percentage price hike for customers , the company knows all too well that its handset will suffer tremendously, with rising wafer costs and skyrocketing DRAM prices making the mobile technology sector uninhabitable unless extreme pivoting is adopted.
Qualcomm’s executive leadership expects expansion into non-handset sectors will generate over 60 percent growth in non-smartphone revenue by fiscal 2027, effectively replacing the revenue stream lost from Apple’s 5G modems, or lack thereof. In short, a major setback from a lucrative customer is being transformed into a golden opportunity, and we’ll bear witness to the fruits of Qualcomm’s efforts next year, so stay tuned.
News Source: Reuters
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