How Qualcomm's New Audio Chips Could Give Apple A Run For Its Money

Apple Inc AAPL may soon have to face heightened competition in the headphone segment, as Qualcomm, Inc QCOM announced a new range of chips designed to connect wireless headphones with devices that run on Alphabet Inc’s GOOGL GOOG Android operating system.

What Happened: Qualcomm has released chips that will allow Android devices to pair with ease with headphones in the same way iOS devices can pair with headphones, due to Apple’s integration of special chips in the hardware, reported Reuters. 

Audio-Technica and Xiaomi Corporation XIACY XIACF will be the initial customers for the chips. Devices are expected to arrive in the summer.

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Why It Matters: Android ecosystem is not as closed or vertically integrated as the iOS one, according to Rahul Patel, a senior vice president at Qualcomm, Reuters reported.

“We want to enable (audio companies) to work seamlessly with Android products,” said Patel.

In December, the Tim Cook-led company launched $549 headphones dubbed “AirPods Max,” which led to social media outrage.

Wireless headphones have emerged as one of Apple’s fastest-growing segments.

The Cupertino, California-based company is also said to be planning a virtual reality headset that may arrive in 2022, which will pitch Apple against Facebook Inc FB and Sony Corporation SNE. 

Price Action: Apple shares traded 1.2% lower at $118.69 in the after-hours trading on Thursday and closed the regular session 1.58% in the red at $120.13. On the same day, Qualcomm shares closed the regular session 2.93% lower at $127.80 and fell 0.63% in extended trading in the after-hours.

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