Iridium Ends Partnership with Qualcomm to Bring Satellite Connectivity to Smartphones

Outline

On November 9, 2023, Iridium Communications Inc. announced the end of its partnership with Qualcomm Inc. to bring satellite-based connectivity to smartphones. The collaboration was announced in January 2023, but Iridium has now decided to go its own way.

According to CNBC, Iridium CEO Matt Desch says the company is “focused on developing its own direct-to-device satellite messaging service for smartphones.” He stated that Iridium believes this is the best way to “provide the most reliable and affordable service to its customers.”

Qualcomm has not yet commented on the end of the partnership.

It is unknown why Iridium decided to terminate its partnership with Qualcomm. However, Iridium may be concerned about Qualcomm’s ability to deliver on its promises. Qualcomm has a history of missed deadlines and delays, and it is possible that Iridium did not believe Qualcomm would be able to bring its satellite-based connectivity service to market on time.

Another possibility is that Iridium is simply looking for ways to save money. Qualcomm is a major supplier of smartphone chips, and Iridium would almost certainly have to pay Qualcomm a significant licensing fee in order to use its chips in its satellite-based connectivity service. Iridium may be able to avoid these licensing fees and save money by going its own way.

Whatever the reason for the separation, Iridium is clearly committed to developing its own direct-to-device satellite messaging service for smartphones. It is unclear whether Iridium will be able to successfully launch this service, but the company has a long track record of success in the satellite industry.

Potential Impact of Iridium’s Decision

The decision by Iridium to end its partnership with Qualcomm is likely to have a number of ramifications. For starters, it means that satellite-based connectivity for smartphones will be delayed. Qualcomm is a market leader in smartphone chip development, and its collaboration with Iridium was viewed as a significant step toward bringing satellite connectivity to smartphones. It is unclear when satellite connectivity will be widely available on smartphones without Qualcomm’s involvement.

Second, Iridium’s decision may make it more difficult for the company to commercialize its satellite messaging service. Qualcomm has a large network of smartphone industry partners, and Iridium would have benefited from Qualcomm’s assistance in getting its service adopted by smartphone manufacturers. Without Qualcomm’s backing, Iridium will have to work harder to persuade smartphone manufacturers to use its service.

Third, Iridium’s decision may raise the cost of satellite messaging services. If Iridium must bear all of the costs of developing and marketing its satellite messaging service, those costs will almost certainly be passed on to customers. This means that satellite messaging services may be more expensive than if Iridium had collaborated with Qualcomm.

Conclusion

The decision by Iridium to end its partnership with Qualcomm is a significant setback for the advancement of satellite connectivity for smartphones. It remains to be seen how Iridium will launch its satellite messaging service without Qualcomm’s assistance. Iridium, on the other hand, is a well-established company with a long history of success in the satellite industry. Iridium may be able to overcome the obstacles it faces and bring satellite messaging to smartphones sooner than expected.