Qualcomm’s iphone bet shrinking faster than expected – a $5 billion pivot?
Qualcomm is rapidly losing ground in the Apple ecosystem, with its share of components for the upcoming iPhone 18 Pro Max plummeting well below 20%, according to newly released data. This signals a dramatic shift in strategy, prompting serious questions about the future of Qualcomm’s mobile chip business and a potential redirection towards data centers.
A bleeding margin: qualcomm’s apple revenue plummets
Cristiano Amon, Qualcomm’s President and CEO, frankly admitted during a recent earnings call that Apple product revenue will decline more aggressively starting in the fourth quarter. He attributed the downturn primarily to supply constraints, a carefully worded response that likely masks deeper issues within the relationship.
The company reported a 20% drop in phone chip revenue for the last quarter alone, totaling $5.09 billion – a stark contrast to the previous year. Looking ahead, Qualcomm anticipates an even weaker performance this quarter, effectively pivoting away from Apple as a significant revenue driver.
The data center gambit: a $5 billion play
But Qualcomm isn’t simply surrendering. Amon is aggressively pursuing a projected $5 billion in data center revenue by 2027, a strategic pivot that represents a significant long-term investment. This move acknowledges the diminishing importance of the smartphone market – at least in the context of Qualcomm’s core business – and aims to capitalize on the burgeoning demand for data infrastructure.
The leaked Tata bill of materials last month hinted at a dual-sourcing strategy for the iPhone 18 Pro’s modem – Qualcomm’s C2 alongside a Snapdragon X80 transceiver with an SDR875 in US models, designed to maintain mmWave 5G connectivity. However, with Qualcomm’s component share now so drastically reduced, the viability of a fully Qualcomm-powered Pro Max remains increasingly doubtful.
The question isn’t if Apple will adopt its own C2 modem, but rather when and where.
Consumer choice: mmwave vs. battery life
For users in the US, the debate boils down to mmWave 5G versus battery life. While Samsung’s Galaxy S26 Ultra handles mmWave through its Snapdragon modem without issue, the decision hinges on prioritizing speed over longevity. Frankly, the vast majority of consumers will likely accept a slight compromise on mmWave for the sake of improved battery performance – a trade-off that Qualcomm’s shrinking influence makes less relevant.
Apple’s C2 modem, if universally deployed, promises better battery efficiency and enhanced privacy through Limit Precise Location. However, the absence of mmWave support in previous C1 and C1X models raises concerns about missing a key feature for many users. It’s a calculated risk, and one that most consumers wouldn’t notice – unless they specifically require mmWave.
Ultimately, a confirmed modem announcement from Apple in September would be a welcome relief, ending this cycle of speculation.
Further Reading: Our iPhone 17 Pro Max review offers a comprehensive assessment of this year’s flagship.