Qualcomm aims to diversify revenue base amid muted global smartphone growth
Qualcomm
is actively pursuing a strategy of revenue diversification, aiming to shift away from catering predominantly to the smartphone industry into new categories, as global smartphone shipment growth remains muted, a top senior executive told ET.
Currently, around 70% of Qualcomm's revenues come from the mobile segment. The company aims to reduce this to 50% by 2029, said Alex Katouzian, Group General Manager, Mobile, Compute, & XR (MCX), Qualcomm.
He added that the diversification is on track, with several emerging areas performing well and contributing increasingly to the topline.
'The PC segment is on track with the primary focus being on brand pushing and channel penetration. The XR (Mixed Reality) segment is doing really well with a growing customer base that now includes Android XR and AOSP Android, not just Meta. Qualcomm's chips are designed into practically every solution that's out there in the XR space,' Katouzian said.
The executive said the wearables and hearables business for the company is expected to double in the next 3-4 years, while automotive and IoT are doing well.
The shift in strategy comes with the global smartphone market reaching maturity and experiencing slower growth and periodic contraction, experts said. This makes it increasingly challenging for Qualcomm to sustain strong revenue growth solely from the mobile segment.
'The shift is not about consumers giving up smartphones, as the smartphone is "very difficult to replace" and
ambient computing
is seen as a "subtle supplement" to it. Instead, the strategy is to move from an "app centric and smartphone at the center" model to "the human at the center with agents becoming the user experience and the user interface," the executive said.
Qualcomm's diversification also comes amidst its rivals strengthening their position in the market. The company is facing increasing challenges from Taiwan-based MediaTek, which now commands a larger volume market share than Qualcomm in India and other markets.
According to Counterpoint Research, MediaTek secured a 38% market share globally in the smartphone SoC (System-on-Chip) shipments in Q1 2025, while Qualcomm trailed at 28%. That said, Qualcomm's revenues from the mobile segment remains much higher than MediaTek's after its focus on increasing its presence in the premium end of the market.
Katouzian asserted that volume is not the key to the company's growth, but rather the share of the wallet.
'While MediaTek might ship more smartphone chipsets by volumes, Qualcomm is far ahead by value because Qualcomm's share of the premium tier is so high in the smartphone market, yielding a much higher value, and triple quadruple the margin compared to what MediaTek can achieve across value-tier phones,' he said.
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