Qualcomm Inc. has terminated its collaboration with Iridium Communications Inc. to provide satellite connectivity for Android devices. The partnership’s cancellation was first disclosed by Qualcomm last week and officially ends on December 3. Following this news, shares of Iridium, a satellite operator based in McLean, Virginia, dropped over 5%.
Last year, Apple Inc. introduced an iOS capability called Emergency SOS during its iPhone launch event. This feature allows users to text emergency services via satellite even in areas with no cell tower coverage. Four months later, Qualcomm showcased a competing feature for Android handsets using Iridium’s satellite constellation to enable communication in remote locations.
Iridium’s satellite constellation consists of more than 80 satellites launched over three decades by two separate companies. The L band of the radio spectrum is used by Iridium satellites to transmit data. This frequency is resistant to interference from adverse weather conditions, making it suitable for emergency communications. However, the L band has limited bandwidth, restricting its use to simple communications applications.
When Qualcomm and Iridium announced their partnership, they aimed to offer two-way texting for emergency use on Android devices, with the possibility of extending the feature to other types of devices. In contrast, Apple’s Emergency SOS feature only allows one-way texting and is exclusive to iPhones.
Iridium stated that it has successfully developed and demonstrated the satellite communications feature mentioned in its partnership with Qualcomm. However, due to a lack of demand, smartphone manufacturers have not incorporated the technology into their devices.
Despite the setback, Iridium plans to explore business opportunities in the mobile market. With the cancellation of the Qualcomm deal, Iridium can now form partnerships with rival chipmakers, handset manufacturers, and operating system developers. The company will offer prospective partners the chance to contribute to shaping its technology development roadmap.
Iridium does not anticipate the cancellation will impact its 2023 financial results. The company expects to finish the year with service revenues approximately 10% higher than the $534.7 million generated in fiscal 2022. It also remains committed to achieving around $1 billion in annual service revenues by the end of the decade.
While there is still a possibility of Qualcomm introducing a satellite communications feature in the future, the decision will likely be driven by increased demand from mobile device manufacturers. As the leading supplier of modem chips and antennas to the Android handset ecosystem, Qualcomm would have a strong incentive to integrate satellite connectivity into its chips.