Qualcomm relies on growth in automotive and IoT segments

The chip giant Qualcomm is stepping up a gear and aiming for an ambitious growth target for its automotive and Internet of Things (IoT) segment businesses by 2029. Together, these areas are expected to generate sales of 22 billion US dollars, with the automotive sector alone contributing 8 billion US dollars. Here, Qualcomm is building on partnerships with renowned car manufacturers such as BMW to enhance computing functionality in vehicles and pave the way for autonomous driving. In the IoT segment, characterized by extended reality devices and industrial applications, the company forecasts revenue of 14 billion US dollars. Of this, 4 billion US dollars are expected to come from the personal computer sector alone, where Qualcomm powers the latest Microsoft Surface laptops with its Snapdragon X Elite chips featuring the GenAI Copilot assistant. Qualcomm CEO Cristiano Amon expressed his enthusiasm following the investor day in New York: "Everyone who buys an X Elite is extremely satisfied with it." Amon emphasized his strong confidence in the PC segment, although not all experts share this optimism unreservedly. Srini Pajuri from Raymond James expressed concerns regarding the challenges with Windows-on-ARM and the competition from both x86 and ARM SoC providers. Bank of America, on the other hand, rates Qualcomm's long-term strategy with a "buy" rating. Tal Liani is more positive about the diversification outside of the mobile phone segment but warns of the need to secure market shares in the newly addressed markets, whose development pace remains uncertain. While the smartphone business continues to make up a large share of the revenue, Apple is working to reduce its reliance on Qualcomm modems. For the Android-based business, Amon expects moderate single-digit growth, which he considers a conservative assumption. In the long term, the company plans to evenly split its revenue between mobile phones and the automotive and IoT segments.