TAMPA, Fla. — Semiconductor giant Qualcomm is scrapping plans to provide the technology Android smartphones would need to directly connect to Iridium’s satellites when they can’t reach a cell tower.

Despite successfully developing and demonstrating a chip enabling everyday phones to connect with satellites for SOS, texts, and other low-bandwidth messaging services, Iridium announced Nov. 9 that no smartphone makers have included Qualcomm’s enabling technology in their devices.

Iridium and Qualcomm had expected smartphones to be released in the second half of 2023 with this capability when they announced their partnership early this year.

Qualcomm had an agreement with Iridium to support hardware development and another to sell the technology to smartphone makers — both will terminate Dec. 3, Iridium spokesperson Jordan Hassin said.

Hassin said Iridium was not part of the talks Qualcomm had with smartphone makers and so could not comment on the lack of traction with them.

Price was likely a contributing factor, according to William Blair analyst Louie DiPalma.

“Qualcomm conveyed to us that even though the Iridium service was functional and available for smartphone manufacturers to incorporate in their phones, the smartphone manufacturers did not have a ‘line of sight on the monetization models’,” he said in a note to investors.

“This implies that smartphone manufacturers were concerned about the economics and were objecting to the price Qualcomm was charging.”

Qualcomm said in an emailed statement that smartphone manufacturers prefer a standards-based approach rather than a proprietary solution. 

Iridium recently indicated it is looking into adding 5G standards-based connectivity to its satellite network, DiPalma noted, which would simplify the handoff between cellular and satellite networks.

Although Qualcomm is terminating efforts with Iridium on a proprietary solution, the company said it remains open to working with the satellite operator on a standards-based approach.

The emerging direct-to-device market remains divided over whether closed networks will win out over more open systems.

Iridium rival Globalstar has teamed up with Apple to give only the latest iPhones the ability to connect to satellites for SOS services beyond the reach of cellular networks.

SpaceX and other companies, including startups Lynk Global and AST SpaceMobile, are developing satellites that would connect to smartphones already in circulation via partnerships with mobile operators and the standards they use.

“While I’m disappointed that this partnership didn’t bear immediate fruit, we believe the direction of the industry is clear toward increased satellite connectivity in consumer devices,” Iridium CEO Matt Desch said in a statement.

Iridium said its canceled Qualcomm partnership does not affect financial guidance for 2023, and it still expects to generate around $1 billion in annual service revenue by 2030.

The operator also said it is now free to re-engage with smartphone makers directly, along with other chipmakers, to chase the direct-to-device market opportunity.

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