While radio-frequency (RF) chip suppliers such as Skyworks Solutions (NASDAQ:SWKS) and Broadcom are expecting big gains from Apple's new iPhone generation, fellow vendor Qorvo (NASDAQ:QRVO) has a different story to tell. It seems to be losing ground to its rivals in smartphone chips. Smartphone chips is already a big market and is expected to keep growing, thanks to Apple's success and the growth of Chinese smartphone companies.

On the other hand, Qorvo's guidance for the current quarter suggests a year-over-year decline in revenue, which raises a red flag as it gets around a third of its revenue by selling iPhone chips. Not surprisingly, the RF chip specialist is now trying to find new avenues to mitigate its sliding influence in the smartphone space -- such as the Internet of Things (IoT).

Different components of the Internet of Things.

Image Source: Getty Images

Qorvo gets serious about IoT...

Qorvo's recent product announcements clearly indicate that it doesn't want to miss the IoT gravy train, as this market could drive substantial demand for its RF chips. More specifically, increasing IoT adoption will drive demand for RF transceivers, the basic component required for enabling communication between devices.

MarketsandMarkets forecasts that the global machine-to-machine connectivity market will hit $27 billion in revenue by 2023, thanks to an increase in demand for wireless connectivity components. Furthermore, Qorvo's internal estimates indicate that more than 25 billion devices will connect to the internet by 2020 as IoT adoption gains steam.

Not surprisingly, the chipmaker has announced a couple of new products in quick succession this month to attack this massive opportunity. First, Qorvo launched a new embedded chip platform that integrates multiple communication protocols for smart-home devices.

The chipmaker believes that this new platform could help potential customers reduce deployment time, since it supports multiple connectivity standards, while also reducing costs given its low power consumption. 

Qorvo is wise to try and get a foot-hold in this market. The number of smart-home systems in North America alone will jump almost 55% this year compared to 2016 levels, to a total of 31.4 million.

The second of Qorvo's latest IoT products also supports more than one connectivity protocol, enabling product designers to use a single transceiver to enable device-to-device communication. This, again, saves time and power, and it won't be surprising if Qorvo is able to use these features to attract more customers.

...but the market is already crowded

The launch of new IoT-related products doesn't guarantee an automatic improvement in Qorvo's top line given the massive competition in this market. The big opportunity that IoT could provide has encouraged Qorvo's rival chipmakers to pile into this market with their own offerings, and some of them already have notable products to show for it.

Skyworks Solutions, for instance, has scored design wins at networking giant Cisco as well as three automotive companies to supply connectivity chips for enabling IoT-related applications. Just like Qorvo, even Skyworks' chip platforms support multiple communication standards, covering a wide variety of applications ranging from smart homes to IoT sensors.

Furthermore, Skyworks seems to have already unlocked the potential impact of the IoT market on its revenue. The company is currently clocking an annual revenue rate of over $1 billion from its non-mobile business, which could only get better as it makes a move into the fast-growing home automation market through virtual assistants.

But Skyworks isn't the only threat that could derail Qorvo's IoT ambitions. Chip giant Qualcomm has already gained tremendous traction in the smart-home arena, claiming to have shipped over 125 million connectivity chips already. Qualcomm has already built a strong suite of IoT-focused chips that are commercially available, which gives it a lead over Qorvo.

Therefore, Qorvo investors shouldn't start dreaming of a turnaround based on the IoT opportunity just yet. The company needs to make tangible progress and arrest its sliding top line, which could eventually help it become an attractive Internet of Things stock -- provided its execution remains strong.

Harsh Chauhan has no position in any of the stocks mentioned. The Motley Fool owns shares of and recommends Apple and Skyworks Solutions. The Motley Fool owns shares of Qualcomm and has the following options: short November 2017 $95 calls on Skyworks Solutions and short November 2017 $92 puts on Skyworks Solutions. The Motley Fool recommends Cisco Systems. The Motley Fool has a disclosure policy.