The investors once believed that Qualcomm Inc's fortunes rose and fell with Apple Inc's iPhone, which uses a key modem chip from the San Diego company to connect to mobile data networks.
As Qualcomm prepares for its investor presentation on Tuesday, analysts said that the looming loss of Apple, which is working on its own chips to replace Qualcomm's chips, might not matter much to Qualcomm's profits.
The worry about Apple possibly moving away is a factor in the increase in revenues, according to Bernstein analyst Stacy Ragson.
The diversification strategy put in place years ago by Cristiano Amon, who ran the company's chip division before becoming chief executive this year.
According to IBES data from Refinitiv, Qualcomm expects to see earnings growth of more than 20 per cent for fiscal 2022, while Wall Street had only been expecting growth of 12.5 per cent. The shares of the company have gone up almost 19 per cent since Qualcomm gave its forecast.
Amon stated during an earnings call on November 3 that any outside of our contract with Apple is an upside to our model. They have a large number of devices. We'll be very happy to engage with them on supply if there are opportunities. Analysts said that Apple's business probably won't drop off at once. Evercore ISI analyst CJ Muse said it was a matter of when not when Apple leaves.
Angelo Zino of CFRA Research said Apple likely will leave in phases, introducing internal chips only for one or two devices initially.
Qualcomm is filling the vacuum left by Huawei's exit from the smartphone market because of the fact that it has gained market share among Android phones. China's Honor is turning to the US chip firm for supply.
Patrick Moorhead, founder of Moor Insights Strategy said that Qualcomm's China handset revenue is growing faster than Apple is growing, which is helping to offset any Apple reductions.