Qualcomm expects a faster-than-anticipated drop in Apple-related revenue, CEO Cristiano Amon said following the release of its fiscal Q3 2026 results. The company warned that supply constraints will sharply reduce the share of its components in the next iPhone—well below its prior estimate of roughly 20%—and that revenue headwinds from Apple will begin in Q4.
Why Qualcomm expects a sharper decline
Qualcomm says supply constraints will limit the presence of its components in the upcoming iPhone launch, accelerating the decline in sales to Apple. The company had earlier projected its parts would account for about 20% of the new-generation iPhone; it now says the share will be “well below” that level, triggering the revenue drop starting in the fourth quarter.
Price increases to protect margins
To offset rising supply-chain costs, Qualcomm will raise prices effective September 1. “We are simply passing on significant cost increases that we have,” Cristiano Amon said, noting the move is intended to preserve margins amid cost pressure.
Shifting sales toward other markets in fiscal 2027
Qualcomm expects that in fiscal 2027 most of its chip revenue will come from categories other than smartphones. The company is banking on growth in its data-center business to help offset the decline in Apple-related revenue recorded in fiscal 2026.
Apple’s modems and the license timeline
Apple has developed its own modems, already used in some iPhone 16, iPhone 17 and iPhone Air models, and rumors suggest a broader transition to in-house chips could occur with the iPhone 18 lineup. Apple is also reportedly working on a C2 modem chip that could be faster and more efficient than competing solutions. Separately, the patent licensing agreement between Apple and Qualcomm runs through March 2027; it remains unclear whether Apple will renew that deal or extend in-house modem use across its entire product range.
What this means
Qualcomm’s disclosures sketch a strategic pivot: the company is responding to a predictable contraction in revenue from a major customer by raising prices and reallocating sales toward other segments, while Apple’s technical choices and the March 2027 license expiry remain key variables for the quarters ahead.
