Qualcomm expects 50% of revenue to be IoT and Automotive by 2030
By
Dan O'Shea Nov 25, 2024 1:33pm
Qualcomm AutoTech Internet of Things (IoT) Automotive
During the company's recent Investor Day event, Qualcomm CEO Cristiano Amon touted the firm's progress since launching its diversification strategy three years ago. (Screen capture of Qualcomm CEO by Dan O'Shea)
Qualcomm expects about half of its overall revenue to be pumped through its IoT and Automotive businesses by 2030, giving itself five years to climb from the not-quite 25% mark those two businesses collectively achieved during the company’s 2024 fiscal year.
To reach 50% of overall revenue, IoT and Automotive together are expected to grow at a 22% compound annual growth rate between fiscal year 2024 and fiscal year 2029, according to a presentation given by Qualcomm CFO and COO Akash Palkhiwala said at the firm’s recent Investor Day 2024 event.
Individually, IoT, which is the bigger business and includes revenue from devices in industrial, mixed reality, PC, and other segments, is expected to grow from $5.4 billion in revenue in 2024 to $14 billion in revenue at the end of fiscal year 2029. Meanwhile, Automotive, a recently unstable revenue source for several chipmakers, pulled in close to $3 billion for Qualcomm in fiscal year 2024, and is anticipated to reach $8 billion in five years.
The Investor Day 2024 data and goal statements arrived about three years after Qualcomm launched itself on a quest during its Investor day 2021 event to diversify itself from its traditional mobile handset business and more deeply into IoT and Automotive, although its effort developing chips for these sectors began years earlier than the formal launch of the diversification strategy.
Qualcomm CEO Cristiano Amon, also speaking during the Investor Day 2024 event, was particularly proud of the company’s Automotive business, whose success, he said is “reflected in five consecutive quarters of record revenue in automotive, and a $45 billion design win pipeline that will be translating into revenue as we have new cars launched. We're working with all major OEMs and Tier 1s, and we're going to expand now to two wheelers and micromobility.”
He added, “The car is a computing space. Vehicles are becoming software-defined. And then you have the addition of assisted driving and autonomy.” He noted that Qualcomm strengthened its ADAS stack with the 2022 acquisition of ADAS and sensor software firm Arriver, recently launched Snapdragon Ride Elite and other platforms, and is working with BMW on AWS to develop an Automated Driving Stack, more details of which it is expected to share next year.
For all Qualcomm’s ambition, its Investor Day 2024 presentation did not seem to excite or reassure investors very much, as it was followed by an immediate 7% decline in the QCOM stock price, though the share price had started to climb back upward at the start of this week. Following the presentation, analysts pressed Qualcomm executives for more details about what the company described as a total addressable market (TAM) of $900 billion by 2030, and for the most part the execs demurred. Follow-up coverage also assessed the Automotive goal as somewhat lower than had been anticipated.
Patrick Moorhead, founder, CEO, and chief analyst of Moor Insights & Strategy,
in a Six Five Media discussion with his Six Five Media partner Daniel Newman, CEO and chief analyst of The Futurum Group, said of the TAM, “...It was large. It was $900 billion. I don't know what is included in that. I do want to figure that out… it's important that we know what is underneath that TAM. I think that the way the market reacted, you had a 2029 view, which is important, but you know, a lot of the investors that we talk to, they only care about 18 months. So, you know, how do you make that connection? I think investors just weren't confident in the run up to it. I think they may have been looking for a bigger automotive number.”