Qualcomm’s Apple Revenue Is Shrinking Faster Than Expected

Qualcomm’s revenue from Apple is dropping faster than the company anticipated. CEO Cristiano Amon confirmed this after the chipmaker shared its latest quarterly earnings report, attributing the decline to supply constraints.

What’s Actually Happening

Qualcomm manufactures the modem chips that connect iPhones to cellular networks. This has been a lucrative business for years. However, Apple is quickly developing its own modem technology, and the shift is happening sooner than Qualcomm expected.

Amon mentioned to Reuters that supply constraints at Apple are speeding up this transition away from Qualcomm components. In simple terms, as Apple increases production of its own modems, it’s cutting back on orders from Qualcomm earlier than they had planned.

This isn’t entirely surprising. Apple has been working toward modem independence for a while now. The company introduced its first in-house modem chip in the iPhone 16e earlier in 2026. What’s changed is the speed of the transition. Qualcomm thought Apple would gradually reduce orders, but that’s not how it’s playing out.

Why Qualcomm’s Stock Went Up Anyway

Here’s the twist: Qualcomm’s stock actually rose by 4.66% after this news. That might seem odd, given the focus on losing business. But Wall Street often reacts based on expectations. If investors had already factored in a worst-case scenario, any news that’s better than that can lead to a stock uptick.

Plus, Qualcomm has been diversifying beyond just Apple and smartphones. The company is making significant strides in automotive chips, PC processors, and industrial devices—areas that don’t rely on a single customer.

Apple’s Modem Journey

Apple’s effort to create its own modems fits into a broader trend. The company has been developing its own processors for years, like the A-series chips for iPhones and M-series for Macs. It’s also designed its own display controllers and Bluetooth/Wi-Fi chips. Modems were the last major component Apple needed to fully control.

In 2019, Apple acquired Intel’s smartphone modem division for $1 billion to speed up this process. The iPhone 16e, released in early 2026, marked the first iPhone to come with Apple’s own C1 modem. Analysts expect Apple to expand the C1 to more iPhone models, and that’s happening quicker than Qualcomm thought.

For context, Apple has historically contributed a significant portion of Qualcomm’s revenue. Losing that revenue gradually over several years is manageable. However, if it happens faster, Qualcomm faces pressure to find new revenue streams quickly.

What This Means

For iPhone users, this transition won’t be noticeable. Apple’s in-house modem will connect just like Qualcomm’s chip did. Whether call quality, data speeds, or battery life differ will only become clear through real-world use, but Apple wouldn’t release a product it thought was worse.

For Qualcomm, the impact is significant but not disastrous. The company has been preparing for this moment. Its automotive chip business and Snapdragon-powered Windows PC efforts are both on the rise, and Android smartphone manufacturers still depend heavily on Qualcomm’s processors. Qualcomm always knew Apple would break away eventually; now, the question is whether it can fill that revenue gap quickly enough.

This situation also highlights a trend where major tech companies are increasingly developing their own silicon, rather than relying on traditional chip suppliers. Apple, Google, Amazon, and Microsoft are all moving in this direction to varying degrees.

Community Reaction

“Apple’s been signaling this since the Intel modem acquisition in 2019. Qualcomm had seven years to diversify, and they did try—automotive, PCs. But losing Apple revenue faster than expected still stings. Their guidance is what matters now.”

— u/SemiWatcher_PDX, r/hardware

“The C1 modem in the 16e actually benchmarks fine for most users. If Apple includes a C2 in the iPhone 17 Pro lineup that matches Qualcomm’s X85 performance, that’s when things will really accelerate.”

— Comment on 9to5Mac YouTube coverage

What To Watch

• iPhone 17 lineup (expected September 2026): The big question is how many iPhone 17 models will include Apple’s C-series modem versus Qualcomm’s chip. If Apple uses its own modems across the board instead of just in entry-level models, Qualcomm’s revenue hit will grow steeper in the next fiscal year.
• Qualcomm’s next earnings call: Analysts will closely monitor whether Qualcomm revises its Apple revenue forecasts downwards again and how Amon discusses the replacement revenue from automotive and PC segments.
• Modem performance comparisons: Independent tests comparing Apple’s C1 (and any future C2 chips) against Qualcomm’s latest offerings will clarify whether Apple’s in-house modems are genuinely competitive.

Sources: MacRumors | 9to5Mac | Reuters