Qualcomm’s revenue from smartphone chips fell 26% year over year in its fiscal fourth quarter, which ended September 27. Handset revenue came to $5.137 billion, down from $6.961 billion a year earlier. The drop comes as the wider phone-chip market shrinks. Counterpoint says budget and mid-range phones are taking the biggest hit.
Chip prices are part of the picture too. Qualcomm says its input costs are rising across wafers, packaging, memory and other materials. It is raising its product pricing to reflect that, a Snapdragon price increase we covered in July. The company expects the full benefit to show in its chip margins in the second half of fiscal 2027.
Counterpoint: cheaper phones take the biggest hit
Counterpoint’s latest report shows the squeeze across the industry. Global smartphone chip shipments fell 21% year over year in Q3 2026. The research firm points to rising memory costs, longer replacement cycles and cautious inventory planning by phone makers.
Entry-level and mid-range tiers suffered most, as brands cut entry-level models from their lineups. Counterpoint expects 2026 shipments to finish down 20%, with a further 3% to 4% decline in 2027. Principal analyst Soumen Mandal expects the flagship chip segment to hold roughly steady next year, even as prices rise. For buyers, the pressure is landing on the cheaper end of the market first.
According to Counterpoint’s figures as reported by 9to5Mac, MediaTek led with 28% of shipments, down 6 points. Qualcomm slipped to 22% from 25%. Apple rose to 21% from 17%, UNISOC held 13% and Samsung climbed to 8% from 6%. For more background, see our earlier reports on budget phones sliding back to 4G and record average phone prices in Q3.
Qualcomm leans on cars and data centers
Outside phones, Qualcomm’s automotive revenue jumped 89% to $1.99 billion. IoT revenue grew 4% to $1.888 billion. President and CEO Cristiano Amon framed the year ahead around that shift in the earnings release:
Fiscal 2027 marks the start of our non-handset revenue inflection, including the ramp of our Data Center business.
Amon says non-handset revenue is projected to grow more than 60% in fiscal 2027. Phones still made up more than half of Qualcomm’s chip revenue this quarter, though.
Qualcomm’s fiscal Q4 2026 in numbers
- Total revenue (GAAP): $10.322 billion, down 8% from $11.270 billion
- Handset chips: $5.137 billion, down 26%
- All QCT chips: $9.015 billion, down 8%
- Licensing (QTL): $1.304 billion, down 7%
- Full-year handset revenue: $24.072 billion, down 13% from $27.793 billion
- Full-year revenue (GAAP): $43.12 billion, down 3%
- Q1 fiscal 2027 guidance: $10.4 billion to $11.2 billion in revenue
Sources: Qualcomm, Counterpoint, via 9to5Mac
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