Qualcomm is adjusting its financial outlook as supply constraints accelerate the decline of its business with Apple. Following the release of its third-quarter fiscal 2026 earnings, Qualcomm CEO Cristiano Amon revealed that the company’s revenue from Apple products will drop more quickly than initially expected starting in the fourth quarter. This acceleration is tied directly to ongoing supply issues that will significantly reduce Qualcomm’s component share in the upcoming iPhone launch.
The tech company shifts focus to data centers to replace lost revenue
For years, Apple has been steadily moving toward using its own internally developed modems, reducing its reliance on Qualcomm. The transition began gaining momentum after Apple acquired Intel’s smartphone modem business in 2019. Now, due to supply constraints, Qualcomm’s share of modems in the next iPhone launch is expected to fall well below the previously estimated 20 percent. This supply-driven reduction provides Apple with an early opportunity to integrate more of its own C-series modems into its device lineup.
Don’t miss the best of The Mac Observer
Set us as a preferred source and our Apple reporting ranks higher in your Google Search results and Discover feed — one tap, no account changes.
In response to the shrinking Apple business, Qualcomm is aggressively diversifying its operations, leaning heavily into the AI data center and automotive markets. Amon stated that the company essentially replaced its Apple revenue with growth in its data center division, which is projected to generate $5 billion in revenue by fiscal 2027.
Despite the faster-than-expected decline in modem sales, Qualcomm will continue to earn patent-licensing royalties from Apple through at least March 2027, maintaining a financial link between the two tech giants.
Discussion