Qualcomm, Iridium Break Off Alliance for Satellite-to-Phone Service Deal

Qualcomm Inc. and Iridium, a satellite communications company, have aborted their partnership deal that aims to provide satellite-to-phone connectivity services. The end of their cooperation was announced on Thursday, Nov. 9.

With the announcement, the stock price of Iridium dropped more than eight percent in after-hours trading from its close at $37.14 per share. As its agreement will Qualcomm was terminated, the satellite communications firm said it is now free to do business with other smartphone and semiconductor traders. This means the company is open to new satellite connectivity deals.

Why the Deal Ended

CNBC reported that Iridium shared that together with Qualcomm, they have “successfully developed and demonstrated the technology.” However, the smartphone manufacturers did not use the technology in their devices and this led the latter to terminate their agreement.

Iridium further shared that Qualcomm notified the company about its decision to scrap the deal last week. The San Diego, California chipmaker was contacted for comments on this matter but was not able to immediately respond.

Looking Forward to New Tie-Ups

PCMag UK reported that the failure of the alliance is a blow in the efforts to allow satellite connectivity on Android phones. But still, Iridium is looking on the lighter side as it can see a lot of potential deals in the smartphone satellite connectivity market.

"While I am 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," Matt Desch, chief executive officer of Iridium, said in a press release. "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.”

He added, “User experience will be critical to their success, and we have proven that we can provide a reliable, global capability to mobile users."

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