Qualcomm just renewed a key agreement with Apple. But the chipmaker is also preparing for a future where its growth depends far less on the iPhone maker.
On Sept. 24, Qualcomm (QCOM) announced it had renewed its global patent license agreement with Apple, effective April 1, 2027. The companies did not disclose the financial terms or duration of the new agreement.
The deal extends an important part of Qualcomm’s relationship with Apple, even as the iPhone maker shifts toward its own modem chips.
Qualcomm’s relationship with Apple spans two parts of its business. QCT, Qualcomm’s semiconductor business, supplies chips including modem systems, while QTL licenses the company’s patent portfolio to device makers.
Apple has been moving away from Qualcomm’s modems as it develops its own chips to avoid paying billions annually to Qualcomm.
In its latest iPhone launch, only the iPhone 18 Pro Max U.S. models use the Qualcomm modem. The rest all use Apple’s own modem. A modem is the chip that connects a smartphone to cellular networks, and Qualcomm is one of the world’s leading suppliers of that technology.
The new agreement announced Thursday, Sept. 24, however, is on the licensing side of Qualcomm’s business. Even when Apple uses its own modem, its devices may still rely on cellular technologies covered by Qualcomm’s patents.
“We are pleased to extend the Apple license agreement,” John Han, executive vice president of Qualcomm Technology Licensing, said in a statement.
But to Qualcomm Chief Financial Officer Akash Palkhiwala, the Apple deal is just one piece of a much bigger transformation underway.
Qualcomm pushes beyond Apple and smartphones
Qualcomm is trying to reduce its reliance on smartphones and expand into data centers, automotive, and IoT, a strategy CEO Cristiano Amon has described as turning Qualcomm into a “platform company.”
“In the next two years, we’ll become this company with three major businesses: data center, smartphones, and auto/IoT,” Palkhiwala explained to TheStreet in an exclusive interview at the Snapdragon Summit 2026.
“Think of it as three legs of the stool with each almost equal in size.”
Related: Qualcomm stock gets harsh reality check after semiconductor rally
Qualcomm’s handset chip sales fell 20% year over year to $5.1 billion in the fiscal third quarter reported in July, partly driven by weaker smartphone demand amid rising memory costs.
Qualcomm’s automotive business, meanwhile, continued to grow. The company reported $1.59 billion in automotive revenue, up 61% from a year earlier. It also said in June that it expects its automotive business to generate $10 billion in annual revenue by fiscal 2029.
Qualcomm targets $15 billion in data center revenue
Data center revenue was not in its July earnings. But Palkhiwala said the business is expected to account for $15 billion of Qualcomm’s expanded $40 billion non-handset revenue target by fiscal 2029. The company had previously targeted $22 billion in non-handset revenue.
“We were previously not in the data center business, so that drives most of the increase,” he said.
Earlier this month, Qualcomm announced a deal with Amazon (AMZN) to develop custom silicon and infrastructure for AI data centers, a major step in its push into the AI market. Palkhiwala added that the company is also working with Meta (META) and one more hyperscaler that’s not disclosed.
Related: Qualcomm’s new Amazon deal sent the stock soaring 9%
“Qualcomm is a new player in data center, and it’s a massive, trillion-dollar market that we have a small share of right now,” Palkhiwala said. “The goal we have laid out is approximately 5% of a trillion-dollar market.”
Palkhiwala said he isn’t too worried about hyperscalers cutting AI spending.
“For a new player, you shouldn’t think about the overall spending impacting us directly,” he said. “These companies are excited to be working with us and we see data center and AI as a tremendous opportunity.”
Palkhiwala also said robotics is another opportunity for the company and is not included in its current $40 billion target for 2029.
“We view robotics as an automotive-like market. Autonomous driving is similar to robotics, using the same type of sensing and requiring AI in the same way. We’re seeing it as an extension of our auto business within the larger category of physical AI,” Palkhiwala said.
“We hope to raise the $40 billion target again,” he said. “That would be the goal.”
Related: Citi doubles down on Micron stock ahead of earnings
