Qualcomm estimates sales growth after Apple, and shares reached record highs

A woman walks past a counter and shows mobile phones at the Qualcomm booth during the 2021 China International Fair for Trade in Services (CIFTIS) in Beijing, China on September 4, 2021. REUTERS / Florence Lo

November 16 (Reuters) – Qualcomm Inc (QCOM.O) said on Tuesday that it expects chip sales to Apple Inc (AAPL.O) will drop to a small drop in the next few years, but predicted a rapid growth in chips for autonomous cars and other connected devices, sending the stock up 7.9% to a record high closing time of $ 1[ads1]81.81.

Qualcomm currently supplies all the modem chips that connect Apple devices to mobile computer networks, but Apple is working on its own modem chips.

At an investor conference in New York, Qualcomm executives said they expect to deliver only 20% of Apple’s modem chips by launching the iPhone in 2023. Qualcomm Chief Financial Officer Akash Palkhiwala expects Apple to account for a “low single-digit” percentage of the company’s chip sales by the end of the financial year 2024.

But Apple losses will be more than offset by gains in other fields, Qualcomm executives said.

Qualcomm expects revenue from the automotive sector, where sales were just under $ 1 billion in fiscal year 2021, to reach $ 3.5 billion in five years and $ 8 billion in 10 years. Earlier Tuesday, Qualcomm received an agreement to sell self-driving car chips to the German car manufacturer BMW (BMWG.DE). read more

Qualcomm executives said Apple had promoted a market for devices such as smartwatches and premium wireless headphones.

While Apple itself supplies chips for these devices, Qualcomm said it aims to supply chips to everyone else. The company said it expects $ 9 billion in revenue from its internet-of-things device that delivers such devices, an 80% increase from $ 5 billion for the device in fiscal year 2021. Growth in this segment will also come from virtual reality. headsets like Meta Platforms Incs (FB.O) Oculus Quest 2, which uses a Qualcomm chip and has now sold 10 million units, executives said, citing third-party estimates.

“We are no longer defined by a single end market and a single customer relationship,” said CEO Cristiano Amon during the event.

Amon also said that Qualcomm sells to Apple what are called radio frequency front chips that are connected to modem chips. Amon said that Qualcomm will have a future chance to compete in selling these chips to Apple regardless of where Apple picks up its modem chips.

Qualcomm executives said that the potential gains are not included in Qualcomm’s forecasts, and that they expect phone chip revenues to grow in line with global markets thanks to strong demand from Android device manufacturers.

Reporting by Stephen Nellis in San Francisco and Chavi Mehta in Bengaluru; Edited by Jonathan Oatis and Matthew Lewis

Our standards: Thomson Reuters Trust Principles.

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