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

Despite the successful development and demonstration of a chip that allows ordinary phones to connect to satellites for SOS, SMS and other low-bandwidth messaging services, Iridium announced on November 9 that no smartphone maker had not included Qualcomm’s enabling technology in its devices.

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

Qualcomm had a deal with Iridium to support hardware development and another to sell the technology to smartphone makers — both will end Dec. 3, Iridium spokesman Jordan Hassin said.

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

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

“Qualcomm advised us that while the Iridium service was functional and available for smartphone makers to integrate into their phones, smartphone makers did not have ‘line of sight on monetization models,'” he said in a note to investors.

“This implies that smartphone makers were concerned about the economy and objected to the price Qualcomm charged.”

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

Iridium recently indicated it was considering adding connectivity based on 5G standards to its satellite network, DiPalma noted, which would simplify handoff between cellular and satellite networks.

Although Qualcomm is ending its 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 connection market remains divided over whether closed networks will prevail over more open systems.

Iridium’s 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 through partnerships with mobile operators and the standards they use.

“While I am disappointed that this partnership did not bear fruit immediately, we believe the industry’s direction is clear toward increased satellite connectivity in consumer devices,” said Matt Desch, CEO of Iridium, in a press release.

Iridium said the cancellation of its partnership with Qualcomm did not affect its 2023 financial guidance and that it still expected to generate approximately $1 billion in annual services revenue by 2030.

The operator also said it is now free to re-engage directly with smartphone makers, as well as other chipmakers, to capture the market opportunity directly on devices.

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