Qualcomm’s Continuity in Modem Dominance for iPhones in 2024

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Piper Sandler Analyst Predicts Continuity in Qualcomm’s Modem Dominance for Upcoming iPhones

In a recent report, Piper Sandler analyst Harsh Kumar reaffirmed Qualcomm’s position as a leading provider of mobile processors and 5G wireless chips for the iPhone. With an Overweight rating and a $165 price target on Qualcomm stock, Kumar shared his insights on the company’s modem prospects for the upcoming iPhone models.

Global Modem Launch and Qualcomm’s Dominance

Kumar emphasized that prior to a major global modem launch, the modem maker must ratify and qualify the modem across various markets worldwide. Interestingly, there has been no news of Apple developing an internal modem. This absence of information leads Kumar to strongly believe that the upcoming 2024 iPhone models, like their predecessors in 2023, will exclusively rely on Qualcomm’s modem technology.

Three-Year Deal and Optimistic Outlook

The analyst also highlighted that Qualcomm and Apple entered into a new three-year agreement in September of last year. This deal covers the production of iPhones to be introduced in 2024, 2025, and 2026. Kumar anticipates that Qualcomm will deliver commendable results in the near future, based on this partnership and the continued demand for its products.

Dismissing Misguided Speculation and Conservatively Guiding Expectations

Responding to various speculations, Kumar refuted claims that Apple will introduce its own modem this year or that Apple will have a larger share than what Qualcomm has forecasted. He dismissed these stories as misguided, asserting that Qualcomm’s conservatively guided modem expectations are more accurate.

Qualcomm’s Growth and Market Performance

Over the past year, Qualcomm shares have experienced a 16% rise. This growth, while commendable, pales in comparison to the 48% surge of the iShares Semiconductor exchange-traded fund.

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