In Q1 of its fiscal 2023, Qualcomm revenues were down but diversification strategy seems to be working
Global macroeconomic headwinds, as well as weak demand and an inventory drawdown hitting the handset business, impacted Qualcomm’s Q1; the company reported a 12% year-over-year revenue decrease to $9.46 billion. However, Qualcomm reported revenue growth in its automotive and IoT businesses which are key pieces to the company’s long-term plan to expand its total addressable market to $700 billion.
Handset revenue in Q1 was $5.75 billion compared to $6.99 billion in Q1 2022. Automotive revenue was up 58% to $456 million, and IoT revenue was up 7% to $1.68 billion. Qualcomm’s IoT business, which executives said was also experiencing depressed demand, includes consumer IoT, edge networking and industrial—this segment “is poised to become our largest addressable market,” Qualcomm CEO Cristiano Anon said on a Feb. 2 earnings call.
Given the financial situation, Amon said, “We’re implementing further spending reductions and streamlining operations without losing sight of the significant growth and diversification opportunities ahead.”
He said the diversification strategy and growth plans “remain unchanged. Our leading technologies, such as advanced wireless connectivity and high-performance, low-power compute and on-device intelligence are enabling the ongoing trends of digital transformation across industries. From a product and technology perspective, we believe we are in the strongest position in our history. Our strategy is working, and we remain focused on expanding our addressable market opportunity to $700 billion in the next decade, firmly establishing Qualcomm as the connected processor company for the intelligent edge.”
On the automotive front, Qualcomm made a splash during CES unveiling a concept vehicle that makes use of the wide range of functionality supported by the Snapdragon Digital Chassis portfolio. During the show, Qualcomm also launched a new SoC that simultaneously supports digital cockpit and ADAS capabilities, and announced a partnership with Salesforce connecting Qualcomm’s Snapdragon Digital Chassis to the Salesforce Automotive Cloud.
Qualcomm’s consumer IoT business encompasses its push into the cellular-enabled PC space with its silicon compute platform and partnerships like Windows on Snapdragon. Amon said work on custom CPUs, called Oryon and based on the Nuvia acquisition, sampled to OEMs on time and are “exceeding our internal KPIs, delivering disruptive CPU performance per watt across tiers.”
Updating on the industrial IoT business, Amon called out “one of the largest ecosystems of manufacturing partners,” and the new QCX216 IoT-optimized modem being used for applications in utilities, tracking, mobility, meterting, home automation, and security. He also noted traction in enterprise video collaboration with partners Poly, Logitech, NEC, Cisco, Bose, AVer and Alibaba.