U.S. semiconductor giant Qualcomm has ended its partnership with satellite communications company Iridium to provide satellite-to-phone services, Iridium announced on Thursday.
Following the announcement, Iridium’s stock dropped more than 8% in after-hours trading, closing at $37.14 per share.
The company explained that while they had “successfully developed and demonstrated the technology,” smartphone manufacturers “have not included the technology in their devices,” prompting Qualcomm to terminate the agreement.
This decision comes as various major players are going through the emerging market of connecting unmodified phones directly to satellites.
Numerous collaborations have been established among smartphone makers, service providers, and satellite companies, including Apple, Iridium, SpaceX, AT&T, T-Mobile, AST SpaceMobile, and others.
Apple, in particular, has invested significantly in its “Emergency SOS with Satellite” service, which debuted with the iPhone 14 models.
Qualcomm stated that smartphone manufacturers have “indicated a preference towards standards-based solutions” for satellite-to-phone connectivity.
“We expect to continue collaborating with Iridium on standards-based solutions while discontinuing efforts on the proprietary solution that was introduced earlier this year,” Qualcomm said.
Iridium noted in its release that the conclusion of its agreement with Qualcomm allows it to re-engage with other companies working on satellite-to-cell projects. The company also emphasized that the termination of the agreement does not impact its full-year 2023 financial guidance.
“While I’m disappointed that this partnership didn’t bear immediate fruit, we believe the industry is clearly moving towards increased satellite connectivity in consumer devices,” Iridium CEO Matt Desch said in a statement.
