Qualcomm grew revenue 5% compared to Q1 2023 despite shrinking IoT business
Qualcomm's revenue across licensing and connectivity divisions reached $9.9 billion in the first quarter of 2024, driven by growth in its mobile phone and automotive businesses. The company reported 16% growth in mobile phones and 31% growth in cars compared to the same period last year. The company acknowledges industry-wide flexibility in IoT (which Qualcomm categorizes as consumer, industrial, and edge networking), but also AI-enabled PCs and AI-enabled PCs using the Snapdragon X Elite platform with Oryon CPUs. , we see an opportunity for devices with 5G Reduced Capability (RedCap) silicon coming to market.
Commenting on the mobile phone market, CEO Cristiano Amon said the company's latest premium-tier Snapdragon 8 Gen 3 mobile platform “sets a new standard for on-device generation AI experiences for premium smartphones.” Stated. He criticized Samsung for adopting the 8th Gen 3 globally in the recent Galaxy S24, and in some markets in the Galaxy S24 and Galaxy S24 Plus.
Although he did not provide details on the length of the agreement, Amon also revealed that Qualcomm has “extended its multi-year agreement with Samsung for the Snapdragon platform for the launch of its flagship Galaxy smartphones.” Regarding licensing of some technologies, Amon pointed out that Apple has extended its global patent licensing agreement with Qualcomm until March 2027, saying, “We have long-term agreements with two important Chinese smartphone OEMs.'' has been updated.”
Regarding the IoT business, Amon said the RedCap-compatible Snapdragon X35 will be in devices in the first half of this year. Although sales were down year-over-year, “we believe that industrial edge devices with connectivity, high-performance computing, and on-device AI are our largest addressable market driven by long-term trends in digital transformation. We continue to believe this is one of opportunity, which is why we are accelerating our investments in solutions, ecosystems, and broader channel enablement to position us for growth while weathering the industry-wide contraction. ” As for points of digital transformation, Amon cited examples such as how Zebra Technologies and Toshiba are demonstrating on-device generated AI for retail inventory management and other use cases, and how Honeywell is demonstrating edge AI powered by Qualcomm for warehouse applications. I gave an example using the device.
In response to questions, Akash Palkhiwala, CFO and COO of Qualcomm, offered his views on macro trends impacting IoT. “From an IoT inventory perspective, what we are seeing is a stabilization on the consumer side…We were one of the first to point out the weaknesses in IoT, and now industrial networking We're seeing that happen in both edge networking and edge networking.'' That said, Qualcomm is aiming for mid-to-high single-digit growth in IoT.
Qualcomm's automotive business continues to perform well, with sales reaching $598 million in the first quarter of this year, an increase of 31% from the same period last year. Amon called this “a key pillar of our growth and diversification strategy.” He announced that 75 new vehicle models launching in 2023 will feature Qualcomm automotive technology, ranging from infotainment and advanced driver assistance systems to other systems that support the transition to software-defined vehicles. I mentioned it.
Returning to Qualcomm's Snapdragon X Elite platform with Oryon CPUs, a result of the Nuvia acquisition. The CPU, which will first hit the market in PCs in the middle of this year, is also at the heart of Qualcomm's broader diversification strategy and on-device AI push. Amon showed us the next step. “As we take; [Snapdragon X Elite] At Mobile Next, we have a real market leadership position across all cores, including CPU as well as graphics and AI, and we are seeing significant interest from partners. We don't stop there. Following smartphones, the company will also enter the automobile business. And we're excited about what our team has accomplished so far. Oryon is very well positioned as the industry leading CPU core. ”
Click here for the first quarter earnings release.
