Apple’s Slow Breakup With Qualcomm Still Hurts — China Android Is Rebounding, But Handset Revenue Is Set to Slip as QCOM Raises Prices

Qualcomm Inc. (NASDAQ: QCOM) said its China Android business hit bottom in the June quarter and has grown sequentially since, but the chipmaker is raising prices, still losing Apple revenue, and facing skepticism over its handset outlook.

Android Rebound Draws Questions as Qualcomm Raises Prices

On Wednesday, CEO Cristiano Amon said on the company’s fiscal fourth-quarter earnings call that “the June quarter marked the low point for our China Android business and we have seen sequential growth this quarter going forward.” Amon added that the company’s plan “assumes global handset units will remain flat to down in calendar ‘27.”

Separately, Qualcomm is raising prices across its products. CFO Akash Palkhiwala said that, as the company disclosed last quarter, it is “implementing price increases across our products to reflect the higher semiconductor input costs.” Palkhiwala noted that Qualcomm expects “the full benefit of these actions to be reflected in QCT gross margins in the second half of fiscal ’27.”

Qualcomm CDMA Technologies, or QCT, is the company’s chip business that sells Snapdragon processors, modems, and other semiconductors for phones, cars, IoT devices, and now data centers. The segment generated $9.015 billion in revenue in the fourth quarter, down 8% year-over-year.

The Android recovery and price increases drew questions from Bernstein’s Stacey Raskon, who said she was surprised by the flat handset outlook and asked whether the Android growth could simply be customers buying ahead of the price increases. Amon said Qualcomm has “been pricing newer platforms, new phones, so less subject to pre-buying effect.”

Apple Wind-Down Weighs on Handsets

Meanwhile, Apple Inc (NASDAQ:AAPL) remains a drag on Qualcomm’s handset revenue, though the company said it has planned for it. Qualcomm forecast QCT handset revenue to decline by a mid-single-digit percentage sequentially in the December quarter, with Android growth offset by “the continued drop-down in Apple product revenue,” Palkhiwala said. He also said that with Apple revenue ramping down, the company does not expect “December to be the high quarter for us.”

Amon noted that Qualcomm has already accounted for the change, saying that “the timing and shape of the Apple modem transition is fully incorporated in how we’re planning the business.”

However, Apple remains a Qualcomm licensee. Amon said the company “also renewed important QTL licensing agreements including Apple and Huawei,” referring to Qualcomm’s patent licensing business.

Qualcomm reported fourth-quarter revenue of $10.322 billion, down 8% year-over-year, beating Street consensus estimate of $10.111 billion. The company saw adjusted earnings of $2.17 per share, beating analysts’ estimate of $2.16.

Shares of Qualcomm declined 7.47% to $160.25 after hours on Wednesday. Year-to-date, the stock has risen about 1.25%.

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