It’s been a tough year for Qualcomm. Obviously various regulators continued their investigations into the company, but such a statement could apply to any year, not just 2017.
The first thing to mark out 2017 was the start of a particularly acrimonious legal battle with smartphone giant Apple, targeting the core of smartphones activities – its intellectual property licensing business. With this already taking its toll on earnings, Qualcomm is also facing a legal review of the way it conducts its operations in its home market, having already had to modify its business in the other important smartphone market – China.
And the second key marker came late in the year in the shape of a somewhat opportunistic takeover bid by Broadcom which – unsurprisingly – was not welcomed with open arms by Qualcomm. If nothing else, this ongoing issue will take up plenty of management time.
Against this backdrop, Qualcomm came out fighting at its Snapdragon Tech Summit, with the focus put squarely on the future. The event brought together media and analysts from around the world – including a healthy Chinese contingent – to listen to the company extolling its virtues.
Led by Cristiano Amon, EVP of Qualcomm Technologies and president of QCT (pictured, left) there was basically no mention of the various unpleasantness surrounding Qualcomm. I’m not sure I heard the word Apple mentioned at all, and Broadcom’s name only came up once – as the butt of a joke about poor Wi-Fi connectivity at the venue.
And there was a passing observation from Amon: “apparently there’s a lot of people interested in what we do lately”.
The revelation from Keith Kressin, SVP of product management at Qualcomm Technologies, that the company’s focus is on 5G, XR – extended reality, Qualcomm’s term for augmented, virtual and mixed reality – and artificial intelligence (AI) didn’t come as much surprise. These, after all, are everyone’s tech hot topics at the moment.
But he also went to great lengths to position Qualcomm as an innovator – and one which is well positioned for the future.
“Our priority is technology. Our priority is innovation. Our priority is investing ahead of the curve. Our priority is partnerships with other technology investors, that is our goal. Yes, we want to ship chips, we want to ship Snapdragon, no doubt about it. But that is not the primary focus: the primary focus is technology leadership to improve the world.”
Amon put numbers on things, stating in fiscal 2017 (the year to 24 September) areas including IoT, networking, automotive and computing were “a $3 billion revenue opportunity for QCT, a 25 per cent increase year-over year. And this is just the beginning, a proof point of how profound and significant this transition is”.
The ongoing takeover of NXP Semiconductors – another issue rumbling in the background of Qualcomm’s turbulent 2017 – will enable it to “expand to many industries beyond those, and at a faster pace”.
The platform on which Qualcomm is looking to build – and which was described as “the largest platform of mankind” – is mobile. With the company citing a forecast of 8.6 billion smartphone shipments between 2017 and 2021, this brings scale and reach to develop technologies which can then be taken into other sectors.
Kressin said: “The smartphone is king. And we drive and innovate on the smartphone and then take those technologies and push them into other devices, like PCs, automobiles, IoT and more.”
Of course, it is not the first time Qualcomm used this mantra (and there have been missteps). But the fundamental logic remains unchanged and, seeing the struggles of rivals such as Intel when it has come to new markets, it is difficult to argue against.
Amon said: “When we are in this era in between Gs, you have this unsiting of the global ecosystem. But we could never be more excited about being a company that has been in the mobile ecosystem. Because of this transformation, because of mobile technology now being used to connect everything around us, transforming the Internet of Things, networking, the automotive industry and computing industry, that alone is expanding the addressable market for Qualcomm by an equal size of what is our mobile business today.”
Connectivity like electricity
With mobile seen as the unifying platform, it goes hand-in-hand with another area in which Qualcomm was keen to trumpet its credentials: connectivity.
Kressin explained: “At Qualcomm, we don’t look at just communications. We don’t look at just computing. We look at a future that involves both, marries them together, and we invest on how those two are going to change the world.”
Amon envisioned a world where “we’re just going to assume connectivity is there, and things will be designed and things will interact, and it will be implemented in a way that assumes that connectivity will be there, in the same way that we approach electricity today”.
“For the next 30 years, our mission as a company is how to interconnect everything around us, by leveraging the technology that has been developed in mobile, the scale of mobile, to transform the devices that are part of life around us, which is one of the major promises of 5G,” he observed.
Of course, it would be remiss of me to report this unquestioningly. One of Qualcomm’s key announcements at the event – the first always connected PCs, powered by Snapdragon – could face a tough sell.
While the benefits – constant connectivity and long battery life – could be compelling for many users (these are two of my main laptop bugbears), it will still be interesting to see how they perform in real-world settings and whether Windows 10 on Arm, with its necessary use of emulation to deliver application compatibility, will mean it is the poor relation to Windows on x86.
HP’s consumer boss Kevin Frost said while the company looked at something similar before, the time (and technology) just hasn’t been right. Time will tell if this is now different.
While any new product introduction carries risks, Snapdragon 845 looks like a solid progression on its most recent predecessor and it will be interesting to see how device manufacturers use its new features in products.
All in all, Qualcomm seems to have achieved what it aimed for with Snapdragon Tech Summit: reaffirming its position as a technology innovator against an unsettled backdrop. And holding the event in Maui probably hasn’t done any harm when it comes to generating goodwill, either.
The editorial views expressed in this article are solely those of the author and will not necessarily reflect the views of the GSMA, its Members or Associate Members.