Huawei's smartphone business has been hit hard by U.S. sanctions, but the company has managed to find a way around the trade limitations with its latest release, the Mate 60 Pro 5G, powered by the Kirin 9000S custom SoC. While not the most powerful chipset in terms of performance and efficiency, its development signals Huawei's intentions of reducing reliance on Qualcomm in the future.
Analysts predict that Qualcomm could potentially lose billions as Huawei looks to shift entirely to Kirin chipsets by 2024. In 2023 alone, Huawei purchased between 40-42 million chipsets from Qualcomm, further highlighting the substantial financial impact the Kirin 9000S will have on the SoC maker.
Qualcomm's revenue stream for 2024 is likely to suffer significantly, with estimates suggesting that the company may ship around 50-60 million fewer units next year compared to the previous year. Assuming each shipment is a Snapdragon 8 Gen 3, and with a cost per SoC of $180, Qualcomm could potentially lose $10.8 billion in revenue next year.
To combat the declining chipset sales, Qualcomm is expected to initiate a price war in Q4 2023 to maintain a strong market share in the region. However, this strategy could come at the expense of the company's annual profits. Additionally, Samsung's upcoming Exynos 2400 poses a threat in certain markets where the Galaxy S24 lineup will be sold.
Adding to Qualcomm's challenges, Apple is rumored to introduce its own 5G modem in 2025, which could lead to a decline in Qualcomm's baseband chip sales in the future.
In light of these circumstances, Qualcomm will need to make crucial decisions in the coming months to prevent continuous losses in the upcoming quarters.
