China Revenue Growth
Q: Is China revenue growth sustainable into the second half?
A: Qualcomm's revenue from Chinese OEMs grew by over 40% year-over-year in the first half of fiscal '24, and this trend is reflected in the third quarter guidance. - - This growth is driven by an improved mix, with strong demand for premium and high-tier devices featuring on-device AI capabilities. - - Qualcomm expects this strength to continue into the second half, supported by new premium launches and the introduction of the Snapdragon 8 Gen 4 chip later this year. - -

Huawei Revenue Impact
Q: How will Huawei revenue affect future earnings?
A: Qualcomm currently ships low-end 4G chips to Huawei, but as Huawei transitions all devices to 5G using their own chips, Qualcomm does not expect any revenue from Huawei's product business in fiscal '25. - This will result in the loss of existing 4G revenue from Huawei. -

Automotive Revenue Growth
Q: Is auto revenue growth sustainable?
A: Qualcomm's automotive revenue is growing as its $45 billion design win pipeline materializes. - Approximately one-third of this pipeline is driven by ADAS, reflecting success in advanced driver-assistance systems. - The company is on track to achieve its target of over $4 billion in revenue in fiscal '26, with a reasonable growth trajectory expected between now and then. - -

AI's Impact on Handset Content
Q: Can AI drive higher content per phone?
A: Yes, AI is driving increased silicon content in Qualcomm's chipsets, particularly with the Neural Processing Unit (NPU) being the largest area of silicon growth. - Consumers desire more capable phones that can run AI applications, which drives demand for higher-tier devices and initiates an upgrade cycle, benefiting Qualcomm through improved mix and share gains. -

QCT Gross Margins
Q: How are QCT gross margins trending?
A: QCT gross margins have remained strong, driven by a favorable mix. - However, Qualcomm is guiding for a sequential decline in gross margin due to the lack of flagship launches in the upcoming quarter. - There is no fundamental change to the gross margin framework going forward. -

PC Business Outlook
Q: When will PC revenues become material?
A: While there is significant product momentum in the PC segment, with devices launching in the back half of the year, material revenue contributions are expected in fiscal '25. - There is not material PC volume forecasted in the June quarter guidance. -

IoT Segment Recovery
Q: How is the IoT business recovering?
A: The IoT segment grew 9% sequentially from December to March, better than expectations. - Qualcomm is guiding for low to mid-single-digit growth into the September quarter. - The recovery is led by the consumer segment, aligned with phones, while industrial and networking recovery timelines are consistent with industry peers. -

QTL Revenue Outlook
Q: Why hasn't QTL improved with China recovery?
A: The QTL business is driven by the overall market size, with a cap on total handset ASPs for royalty calculations. - The benefits seen in QCT from a higher premium mix do not directly translate to QTL revenue, as royalties are capped above certain price points. -

RF Front-End Sustainability
Q: Are RF wins sustainable if modem share changes?
A: Qualcomm's modem-RF architecture provides a sustainable advantage through integrated end-to-end solutions, offering performance and time-to-market benefits. - This advantage is expected to persist regardless of changes in modem share. -

AI Applications in Handsets
Q: What drives consumer upgrades to AI handsets?
A: AI enables new use cases on devices, similar to the early days of smartphones. - Developers are integrating AI models into applications, enhancing features like imaging and language processing. - Qualcomm has optimized over 100 different models for on-device AI, which is creating consumer interest and driving upgrades to more capable devices. -