Premium Handset Chips: Can Qualcomm Maintain Its Market Edge?

Qualcomm’s handset business is firing on all cylinders, raking in $6.96 billion last quarter—a solid 14% bump year-over-year. Projections peg fiscal 2025 handset revenues at $27.8 billion, making up roughly 63% of the company’s total earnings. The driver? Explosive demand for Snapdragon-powered flagship Android devices from global heavyweights like iQOO, Honor, ASUS, OnePlus, and Vivo.

But here’s where it gets tricky. Qualcomm faces mounting headwinds that could eat into these gains. MediaTek is snapping at its heels in the mid-range and budget segments, squeezing margins and market share. U.S.-China trade frictions are cooling handset demand across the board. And perhaps most threatening: major players like Apple and Samsung are increasingly building their own chips in-house, which directly threatens Qualcomm’s traditional supplier role.

Doubling Down on Premium to Fight Back

Qualcomm’s counterplay? Go upmarket. The company is laser-focused on dominating the premium flagship segment with cutting-edge Snapdragon chips. The recently launched Snapdragon 8 Gen 5 packs serious firepower—lightning-fast performance, advanced AI engines, next-gen graphics, and camera tech that leaves older chips in the dust. This strategy aims to lock in high-margin revenue from flagship makers.

The broader 5G chipset market backdrop looks bullish. Precedence Research forecasts the global 5G chipset market will explode to $126.4 billion by 2030 from $18.7 billion in 2022—a punishing 27% CAGR. That spells serious growth opportunity for Qualcomm’s handset division if it can hold its premium fortress.

The Competitive Battlefield Heats Up

Qualcomm isn’t fighting alone. Apple just rolled out M5-powered iPad Pro and MacBook Pro units, plus an upgraded Vision Pro. The iPhone 17 series uses the A19 chip, while the iPhone Air sports the A19 Pro—both delivering faster speeds, sharper graphics, and AI smarts. Apple’s vertical integration strategy is systematically reducing its dependency on external chip suppliers.

Broadcom brings another dimension: Wi-Fi 8 chips for smartphones and connected gear, boosting speed and reliability. Beyond premium segments, Broadcom is also capturing emerging market share with affordable LTE chips for brands targeting India and similar markets.

Valuation and Stock Momentum

QCOM shares have gained 11.1% over the past year, trailing the broader semiconductor industry’s 35.3% advance. On a valuation basis, QCOM trades at a forward P/E of 14.26—notably cheaper than the industry average of 34.54.

Earnings momentum is ticking upward. 2025 estimates rose 2% to $12.15 per share over the past 60 days, while 2026 forecasts climbed 3.4% to $12.60. The positive revision trajectory suggests analyst confidence in Qualcomm’s ability to navigate near-term challenges and capitalize on 5G handset tailwinds.

The critical question: can Qualcomm’s premium-focused handset strategy generate enough high-margin revenue to offset competitive pressures and in-house chip development trends from major OEMs? The next few quarters will be telling.