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Qualcomm does not need Apple any more

by on16 November 2021

Free at last

While for a while Qualcomm’s fortune increased with that of Apple, but now Wall Street thinks the company has broken free.

Investors appeared to write off Qualcomm when Apple ditched the outfit’s tech but now it seems that the company has a plan b which is much better.

Today Qualcomm prepares for an investor presentation on Tuesday where it will outline plans to land its chips in everything from virtual reality headsets to self-driving cars to telecommunications gear.

Bernstein analyst Stacy Ragson wrote in a note that Qualcomm y, revenues are getting to the point where the worry over Apple possibly moving away is much smaller.

This is because of the diversification strategy put in place years ago by Cristiano Amon, who ran the company's chip division before becoming chief executive this year.

Earlier this month, Qualcomm said it expects adjusted earnings growth of more than 20 per cent for fiscal 2022, where Wall Street had only been expecting growth of 12.5 per cent, according to IBES data from Refinitiv. Shares of the company have risen almost 19 per cent since Qualcomm gave its forecast.

"Anything beyond our contract with (Apple) is an upside to our model," Amon said during an earnings call Nov. 3. "They have many devices. And if there are opportunities, we'll be happy to engage with them on supply."

CFRA Research’s Angelo Zino said Apple likely will leave in phases, introducing internal chips only for one or two devices initially.

And in the meantime, Qualcomm has gained market share among Android phones because Qualcomm customers are filling the vacuum left from Huawei's exit from the smartphone market. Brands such as China's Honour are turning to the US chip firm for supply.

Moor Insights & Strategy founder Patrick Moorhead said: "Qualcomm’s China handset revenue is growing faster than Apple is growing, which is helping to offset any Apple reductions."

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