Qualcomm posted $8.3 billion in revenue during the fiscal fourth quarter of 2020, says the company’s earnings report published today. The earnings are up 73% year-over-year from Q4 2019. The improved performance was due to the use of Qualcomm’s 5G chips being used in Apple’s new iPhone 12 lineup and other smartphones.
The Wall Street Journal reports Qualcomm CEO Steve Mollenkopf said that while some of the earnings reflected iPhone sales, earnings will be more substantial in Q1 2021. “Our investments in 5G are coming to fruition and showing benefits in our licensing and product businesses,” said Mollenkopf.
While A good chunk of Qualcomm’s revenue in Q4 was from a one-time $1.8 billion payment from Huawei, Qualcomm’s sales were still up 35% year-0ver-year.
Qualcomm benefited from the settlement of a long-running legal battle with Apple over licensing fees after Apple realized it would not be able to rely on Intel to supply 5G chips for its 2020 iPhone lineup. As part of the settlement, Apple and Qualcomm signed a multi-year licensing deal, which ensured that all iPhone 12 devices would boast Qualcomm 5G modems.
While Apple will rely on Qualcomm chips at least through 2023, Apple is developing its own 5G modem chips in-house and will eventually shift to using its own technology.
The Cupertino firm got a leg up on 5G modem development in 2019 after it purchased the majority of Intel’s smartphone modem business for $1 billion. Intel’s former chip team has joined Apple’s cellular technologies group, and the move is expected to help Apple to accelerate its 5G development.