Qualcomm’s smartphone future looks brighter with AI

livemint.com:

The irony of an AI iPhone is that it could also help one company that Apple is least interested in helping. Investors are increasingly enthusiastic about such a device following Apple’s latest earnings. Those results showed a pronounced weakness in iPhone revenue during the March quarter, but that was already expected, and the company cushioned the news with a generous stock buyback.

Chief Executive Tim Cook also used the occasion to further tout Apple’s interest in generative artificial intelligence, which has analysts more convinced that an AI-enabled iPhone is on the horizon. Ben Reitzes of Melius Research predicted “an AI-driven iPhone supercycle is likely coming in 2025" in his note to clients. Apple’s shares jumped 6% on Friday, the stock’s best single-day gain in 18 months.

That followed an even better day for Qualcomm. The maker of modem chips used in the iPhone and many other wireless devices saw its stock jump nearly 10% on Thursday after its own March quarter results, where chip sales were helped by AI-enabled Android phones such as Samsung’s latest Galaxy family that went on sale in January. A growing number of smartphones and personal computers with AI processors and capabilities embedded in the hardware are making their way to the market this year.

Such on-device AI offers benefits such as faster speed in processing AI tasks as well as greater privacy—as less data has to go back and forth between the cloud for such tasks. Samsung’s Galaxy S24 phones offer functions such as real-time translating and image-based web search. The market has been receptive; unit sales of the S24 phones during their first three weeks after launch were up 8% from the previous Galaxy family’s sales last year during the same window,