Qualcomm now expects to lose Apple modem revenue faster than it previously anticipated, with CEO Cristiano Amon saying supply constraints will push the decline well beyond the company’s earlier projections. The drop begins in Q4 fiscal 2026, which aligns with the iPhone 18 launch window, and Qualcomm is already repositioning itself to absorb the hit.
Reuters reported the comments, which Amon made in an interview following Qualcomm’s third fiscal quarter 2026 earnings call on July 29. The supply chain shortages are accelerating Apple’s shift to its own modem chips faster than Qualcomm’s internal models had accounted for. Qualcomm had previously estimated it would supply modems for around 20 percent of the next iPhone launch, and the actual figure will come in well below that.
Prices go up, revenue goes down
Qualcomm’s response has two parts, it is raising prices starting September 1, with Amon framing this as a pass-through of rising supply chain costs rather than a margin grab. The company is also accelerating its pivot away from smartphone silicon, with fiscal 2027 guidance projecting that most chip sales will come from non-smartphone categories. Amon said Qualcomm expects its data center division to generate $5 billion in revenue by fiscal 2027, adding, “We kind of replaced Apple with the data center.”
Whether that claim holds up is a legitimate question as Apple represented a significant chunk of Qualcomm’s modem business, and data center silicon is a crowded, competitive segment that Qualcomm is entering as an underdog against Nvidia, AMD, and custom silicon from the hyperscalers themselves.
Where Apple’s modem roadmap stands
Apple’s own modem history now spans three chips across three devices: the C1 in the iPhone 16e, and the C1X variants used in the iPhone 17e and iPhone Air. The next-generation C2 is expected to close the capability gap with Qualcomm with mmWave 5G support and better power efficiency. The iPhone 18 Pro is expected to use the C2 outside the United States, while US models will reportedly retain a Qualcomm modem due to regional wireless infrastructure differences. That split suggests Apple is not yet comfortable deploying its own modem in the market with the most demanding 5G requirements.
Beyond iPhone 18, Apple’s apparent target is to have modems that outperform Qualcomm on both speed and AI functionality by 2027, with the 20th anniversary iPhone likely to be the first high-end US model to ship without Qualcomm silicon inside.
The patent licensing agreement between Apple and Qualcomm adds another layer of uncertainty. That deal runs through March 2027, and it is not clear whether Apple will renew it or move to an all-in-house modem lineup that also requires renegotiating its underlying intellectual property exposure.
The story Qualcomm has been telling investors for three years, that it was managing this transition gracefully and diversifying ahead of the Apple cliff, is now looking a lot thinner. Supply constraints doing Apple’s modem independence work for it is not a scenario Qualcomm built its guidance around, and it shows.
