Iridium drops after Qualcomm terminates satellite messaging agreements

Earlier, Iridium Communications (IRDM) announced an update to its relationship with Qualcomm Technologies, a subsidiary of QUALCOMM Incorporated (QCOM), stating: “Iridium previously announced that it entered into agreements with Qualcomm to enable satellite messaging and emergency services in smartphones powered by Snapdragon Mobile Platforms using Iridium’s satellite network. The companies successfully developed and demonstrated the technology; however, notwithstanding this technical success, smartphone manufacturers have not included the technology in their devices. Due to this, on November 3, 2023, Qualcomm notified Iridium that it has elected to terminate the agreements, effective December 3, 2023.” Iridium CEO Matt Desch said: “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. Led by Apple today, MNOs and device manufacturers still plan, over time, to provide their customers with expanded coverage and new satellite-based features, and our global coverage and regulatory certainty make us well suited to be a key player in this emerging market. User experience will be critical to their success, and we’ve proven that we can provide a reliable, global capability to mobile users.” The company added: “With the termination of these agreements, Iridium will be free to directly re-engage with smartphone OEMs, other chipmakers, and smartphone operating system developers that the Company had been collaborating with previously. Iridium will also be pursuing new relationships with smart device OEMs, chipmakers, and developers for its existing and future service plans. Companies electing to adopt an Iridium solution today will have long-term service certainty and can be involved in Iridium’s Narrowband Non-Terrestrial-Network service development planning, which was announced at the Company’s Investor Day in September 2023. The termination of these agreements does not affect Iridium’s financial guidance for full-year 2023, as provided in its October 19, 2023 earnings release. The Company continues to expect that, as announced at Investor Day, it will generate about $1 billion in annual service revenue by 2030 and have the capacity to generate approximately $3 billion in shareholder returns through 2030.” In late morning trading, shares of Iridium are down $2.48, or 7%, to $34.66.