Qualcomm says Apple modem share will fall well below 20%
Supply constraints are accelerating Qualcomm exit from the Apple modem business. Handset chip revenue fell 20% year over year. The data-center pivot is now the explicit offset.
Qualcomm fiscal third-quarter results confirmed what the company had only hinted at earlier: Apple-related revenue is eroding faster than previously guided. CEO Cristiano Amon told investors that supply constraints across the semiconductor ecosystem will cut Qualcomm share of modems in the next iPhone launch to well below its earlier estimate of roughly 20%. Apple product revenue is now guided to fall about 50% sequentially from the September quarter to the December quarter.
Handset chipset sales dropped 20% year over year to $5.09 billion, pressured by memory costs, higher input prices and softer demand from Chinese handset makers. Rising device prices pushed consumers toward lower-tier and older models, compressing the mix. GAAP net income fell 25% to $2.0 billion. Total revenue slipped 4% to $9.95 billion, adjusted earnings of $2.21 per share missed consensus, and the stock fell sharply after hours.
Amon framing was blunt: We kind of replaced Apple with the data center. Qualcomm guided non-handset revenue growth to accelerate from 24% in fiscal 2026 to more than 60% in fiscal 2027, and has set a $40 billion non-handset revenue target for fiscal 2029. Automotive set a quarterly record at $1.6 billion. Broad price increases take effect September 1 to recover margin lost to the memory-cost spike.
The broader signal is the one running through memory and AI infrastructure all year: capacity that once served consumer devices is being absorbed by data-center demand. The Apple modem transition was always coming. Supply constraints simply compressed the timeline.