Semiconductor giant Qualcomm has opted to scrap its plans to provide technology enabling direct connectivity between Android smartphones and Iridium's satellites in the absence of cellular service. Despite successfully developing a chip that allows phones to connect with satellites for emergency communication and low-bandwidth messaging, Iridium announced on November 9 that no smartphone makers have incorporated Qualcomm's enabling technology into their devices.
The collaboration between Iridium and Qualcomm, announced earlier this year, aimed to see smartphones with satellite connectivity capabilities released in the second half of 2023. However, the lack of integration of Qualcomm's technology into smartphones has led to the termination of agreements between the two companies, including support for hardware development and technology sales to smartphone manufacturers, scheduled for December 3.
Iridium spokesperson Jordan Hassin stated that Iridium was not part of Qualcomm's discussions with smartphone makers and, therefore, could not provide insights into the reasons for the lack of traction. Analysts suggest that pricing may have played a role, with concerns about the economic viability of Qualcomm's solution.
William Blair analyst Louie DiPalma noted that Qualcomm conveyed that smartphone manufacturers lacked a “line of sight on the monetization models,” suggesting apprehensions about the pricing structure. Qualcomm, in response, mentioned that smartphone manufacturers prefer a standards-based approach over a proprietary solution.
While Qualcomm terminates its efforts on a proprietary solution with Iridium, the company expressed openness to collaborating on a standards-based approach. Iridium, exploring the addition of 5G standards-based connectivity to its satellite network, aims to simplify the transition between cellular and satellite networks.
The direct-to-device market, marked by competing approaches, sees Globalstar partnering with Apple for satellite connectivity exclusive to the latest iPhones, while companies like SpaceX, Lynk Global, and AST SpaceMobile work on satellite solutions in collaboration with mobile operators.
Iridium CEO Matt Desch expressed disappointment over the immediate outcome but emphasized the industry's direction toward increased satellite connectivity in consumer devices. The termination of the Qualcomm partnership does not impact Iridium's financial guidance for 2023, with expectations to generate around $1 billion in annual service revenue by 2030. Iridium now looks to re-engage with smartphone makers and other chipmakers directly to explore opportunities in the evolving direct-to-device market.