During an earnings call on February 6, 2025, Qualcomm's senior executives highlighted the company's success in premium market segments despite overall smartphone market stagnation. This premiumization trend has been partly influenced by TSMC's recent price adjustments for their 3-nanometer and 4-nanometer products.

In a significant milestone, Qualcomm CEO Cristiano Amon announced that the company's Qualcomm CDMA Technologies (QCT) division recorded its first-ever US$10 billion quarter, with revenue reaching US$10.1 billion.

Looking forward, Qualcomm CFO Akash Palkhiwala projected that fiscal 2025 (April 2024 to March 2025) Qualcomm Technology Licensing (QTL) revenues would align with fiscal 2024 figures, based on expectations of flat or low-single-digit growth year over year. However, Palkhiwala noted that this projection excludes potential upside opportunities, such as China's trade-in subsidy program and AI-driven replacement demand.

• Edge AI advancement

Amon expressed optimism about edge AI developments, highlighting improvements in AI model efficiency and on-device processing. He emphasized that models like DeepSeek-R1 are rapidly evolving to become more compact, capable, and efficient, enabling them to run on Snapdragon-powered smartphones, PCs, and headphones shortly after release.

As AI processing increasingly moves to local devices, Qualcomm anticipates that while cloud-based training will continue, inference will predominantly occur on-device. This transition is expected to enhance AI accessibility, customization, and efficiency across various devices.

• PC market gains

According to Circana data cited by Amon, Snapdragon X-Series processors captured over 10% of Windows laptops priced above US$800 in US retail as of December 2024.

Qualcomm reaffirmed its long-term revenue target of US$4 billion from Windows PCs by 2029, an increase from its previous total addressable market estimate of US$35 billion. The company has secured over 80 design wins for the X-Series and plans to launch more than 100 devices between 2025 and 2026.

• AI smartphone momentum

During the earnings call, Amon emphasized that the Snapdragon 8 Elite for Galaxy enables AI-enhanced features in the Galaxy S25 series through integrated Google Gemini technology. He anticipates rising adoption of AI-driven smartphones, signaling a significant shift in mobile technology.

The company is experiencing unexpectedly high demand for its Snapdragon 8 Elite, driven by increased market share with Samsung following the global release of the Galaxy S25 and strong consumer interest in China. Market data indicates growing premium smartphone adoption, with the Snapdragon 8 Elite performing particularly well.

While the Chinese government's subsidy program, initiated in January 2025, is still in its early stages, Qualcomm expects clearer visibility by next quarter. Historically, such subsidies have expanded market size, though these potential opportunities are not yet incorporated into the company's second-quarter guidance.

• Premium segment growth

The company noted that customer gains in the premium segment and the introduction of AI features are driving higher demand. Qualcomm indicated that devices using Snapdragon 8 Elite in China within the premium tier qualify for subsidies, though this impact is not reflected in second-quarter guidance. The company expects continued growth from increasing premium device adoption driven by end-consumer demand.

Regarding pricing, Qualcomm explained that higher Snapdragon chip prices primarily reflect consumer demand for more capable smartphones featuring AI, advanced processing, and enhanced connectivity.

Furthermore, the company acknowledged that TSMC's price increases for 3-nanometer and 4-nanometer chip technologies, effective January 2025, are contributing to higher costs. Qualcomm plans to implement gradual price adjustments to account for these increases over time.