⚠ The Buyers Have the Purchasing Power, and the Filing Says SoHigh threat
Qualcomm (QCOM) — threat to the moat
Qualcomm's own filing says its customers' purchasing power may result in lower prices. Read that as guidance.
The customers with the most negotiating power are the ones Qualcomm most depends on, and the filing says so.
Qualcomm's own risk language notes that market-share concentration among a few companies, and the corresponding purchasing power of those companies, may result in lower prices for its products.1 That is a supplier describing the position it is in: Apple, Samsung and Xiaomi were each 10% or more of consolidated revenues in fiscal 2025.2
The pricing pressure does not need a lost design win to arrive. A customer that credibly could build the part, or credibly could move to MediaTek, negotiates as if it will, and the concession comes out of gross margin rather than out of revenue — where it is much harder to see.
The most specific version of this is already disclosed. Apple buys the thin modem rather than the integrated platform, which carries lower revenue and margin. The largest customer had already negotiated itself into the cheapest possible relationship before it left.
Watch QCT's pre-tax margin rather than QCT's revenue. It was 30% in fiscal 2025 against 29% in 2024. Concessions to large customers show up there first.
- ReportedQualcomm's own risk language notes that market-share concentration among a few companies, and the corresponding purchasing power of those companies, may result in lower prices for its products.Qualcomm Incorporated, Form 10-K FY2025 — Item 1A, Risk Factors. Market-share concentration among a few companies, and the corresponding purchasing power of these companies, may result in lower prices for Qualcomm's products, which could adversely affect revenues and margins. Apple purchases Qualcomm's MDM (thin modem) products, which do not include its integrated application processor technology and which have lower revenue and margin contributions than the combined modem and application processor products; to the extent Apple devices using MDM products take share from customers using the combined products, revenues and margins would be adversely affected. The filing also carries risk factors on customers vertically integrating by developing their own integrated circuit products, on dependence on key personnel, and on the consequences of indebtedness. — FY2025 · publ. 2025-11-05 · source ↗
- ReportedQualcomm's own risk language notes that market-share concentration among a few companies, and the corresponding purchasing power of those companies, may result in lower prices for its products. That is a supplier describing the position it is in: Apple, Samsung and Xiaomi were each 10% or more of consolidated revenues in fiscal 2025.Qualcomm Incorporated, Form 10-K FY2025 — Item 1A, Risk Factors. Market-share concentration among a few companies, and the corresponding purchasing power of these companies, may result in lower prices for Qualcomm's products, which could adversely affect revenues and margins. Apple purchases Qualcomm's MDM (thin modem) products, which do not include its integrated application processor technology and which have lower revenue and margin contributions than the combined modem and application processor products; to the extent Apple devices using MDM products take share from customers using the combined products, revenues and margins would be adversely affected. The filing also carries risk factors on customers vertically integrating by developing their own integrated circuit products, on dependence on key personnel, and on the consequences of indebtedness. — FY2025 · publ. 2025-11-05 · source ↗