November 17, 2021
By Bob O'Donnell
Though it hasn’t quite achieved the brand recognizability of big chip companies like Intel, AMD or Nvidia, there’s no doubt that Qualcomm has been on a roll over the past few years, particularly because of the company’s integral role in developing 5G technology. Yet, despite its growth, most people still primarily think of Qualcomm as a company that supplies specialized chips, like modems for smartphones.
The truth is, Qualcomm has been building components and software platforms that support multiple types of wireless standards (including WiFi and Bluetooth), as well as things like wearables, earbuds, PCs, and AR (augmented reality) or VR (virtual reality) headsets, for some time now. Unfortunately, not that many people know or understand the extent of the company’s offerings.
In a direct effort to address that issue, newly appointed CEO Cristiano Amon and other Qualcomm leaders laid out a comprehensive new vision that ties all those elements and more together at the company’s recent Investor Day event. Under the banner of empowering the connected intelligent edge, Amon and others highlighted the company’s growing efforts at diversifying beyond its heritage in mobile devices to include consumer and commercial IoT, network infrastructure and more. Importantly, they also laid out a series of numbers and new forecasts to back up their plan to shoot for a 7x increase in their addressable market over the next decade or so.
At the same time, Qualcomm announced an important new design win for its Snapdragon Ride platform with BMW, highlighting the company’s growing presence in the automotive market. Full details are still forthcoming, but essentially, future versions of at least some of BMW’s ADAS (Advanced Driver Assistance System) features in cars starting in 2024 will be powered by Qualcomm chips.
Building off of last week’s strong quarterly earnings, the news served to highlight the company’s recent advances as well as the important shift in priorities that Amon is making to the company’s direction. Having previously led the technology and products side of Qualcomm, it isn’t surprising to see him make these moves, but they do reflect a company that’s a bit less focused on its licensing business and more driven by new products and technologies.
The announcements also allowed the company to address the albatross that some feared hung around its neck—the potential loss of 5G modem revenue from Apple as the iPhone maker eventually shifts to a self-designed part. Qualcomm’s new financial models showed that loss to be of significantly smaller concern than many first thought.
In addition, company leaders emphasized the increasing focus on these diversified markets could all be handled by the company’s single technology roadmap. In other words, they made it clear that their core technological capabilities in connectivity, compute, graphics, edge AI and camera can be used across multiple markets—a great way to leverage these technologies to their fullest extent. As one small example, they discussed how their advancements in smartphone photography can be used to provide better image sensor performance in connected cars.
Qualcomm also discussed advancements it was making in several of its lesser known, but growing markets. In the area of RF Front Ends (RFFE), which are chips that sit between a cellular connected device’s antenna and modem, for example, the company discussed how the advancements it made for smartphones can be leveraged into automotive, IoT, and other applications.
In the computing space, Qualcomm also gave a few more tidbits about its upcoming CPU design that’s being made possible by its Nuvia acquisition. Specifically, the company said it would be sampling the chip in 2022 and expected commercial products in 2023. Importantly, company leadership clarified that they are working on Nuvia-designed CPU cores for high-end smartphones and automotive applications in addition to the core market of PCs. They also hinted that they expect to see performance levels in PCs that they believe will rival Apple’s M-series chips. Obviously, Qualcomm will have to prove that point to the rest of the world, but the fact that it is willing to make that kind of claim does provide some insight into the level of technical sophistication we should be able to expect.
What’s fascinating about the total picture that Qualcomm laid out at its Investor Day is that, for long-time company observers, there really wasn’t anything dramatically new, yet the vision was much broader. The company has been in the automotive and PC markets for some time now, for example, and it’s been enabling connected IoT devices for a long time as well. Similarly, it has been doing AI-based processing in its smartphone chips for many years. What is new is that the world around the company has shifted so much that the concept of an intelligent connected edge now makes significantly more sense than it did before the pandemic. In fact, this is yet another classic example of how the acceleration of existing technology adoption is creating important new opportunities for companies that have been smart enough to plan for it and wise enough to recognize that the time has come. Kudos to Qualcomm for making those observations. Now we just need to see how they execute on this new vision.
Here’s a link to the original column: https://seekingalpha.com/article/4470152-qualcomm-expands-its-view-to-the-connected-edge
Bob O’Donnell is the president and chief analyst of TECHnalysis Research, LLC a market research firm that provides strategic consulting and market research services to the technology industry and professional financial community. You can follow him on Twitter @bobodtech.
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