The new Qualcomm boss believes that by next year his company will only have a chip for laptop manufacturers, which wonders how it can compete with Apple, which last year introduced laptops using a specially designed CPU chip, which can boast with longer battery life.
Longtime processor suppliers Intel and Advanced micro devices do not have chips with energy efficiency like On Apple. Qualcomm The CEO Cristiano Amon told Reuters on Thursday that he believes his company can have the best chip on the market, with the help of a team of chip architects who previously worked on the Apple chip but now work at Qualcomm.
In his first interview since taking the top job at California-based Qualcomm in San Diego, Amon also said the company is counting on revenue growth from China to boost its core smartphone business, despite political tensions.
“We will become big in China,” he said, noting that US sanctions against Huawei enable Qualcomm to generate much more revenue.
Amon said the cornerstone of his strategy comes from a lesson learned in the smartphone chip market: It’s not enough to just provide modem chips for wireless data connectivity on phones. Qualcomm also had to provide the brain to turn the phone into a computer, which it now does for most premium Android devices.
Now, as Qualcomm seeks to push 5G connectivity into laptops, it is pairing modems with a powerful CPU or CPU, Amon said. Instead of using computational master plans from longtime partner Arm Ltd, as it now does for smartphones, Qualcomm has concluded that it needs specially designed chips if its customers compete with new Apple laptops.
As head of Qualcomm’s chip division, Amon is leading this year’s $ 1.4 billion (approximately $ 1,480 crore) acquisition of startup Nuvia, whose former Apple founders helped design some of these Apple laptop chips before leaving. to form the startup. Qualcomm will start selling Nuvia-based laptop chips next year.
“We had to have leading performance for a battery-powered device,” Amon said. “If Arm, with which we have been connected for years, eventually develops a processor that is better than what we can build ourselves, then we always have the opportunity to license from Arm.”
Amon said Qualcomm has no plans to build its own products to enter the other major processor market, cloud computing data centers. But it will license Nuvia’s projects to cloud computing companies that want to build their own chips, which could put it in competition with parts of Arm.
“We are more than willing to use the assets of the Nuvia processor to partner with companies that are interested as they build their data center solutions,” Amon said.
Telephone chips accounted for $ 12.8 billion (approximately 95,790 kroner) of its 16.5 billion (approximately 1.23,480 kroner) in chip revenue in the last fiscal year. Some of Qualcomm’s best customers, such as the phone maker Xiaomi, are in China.
Qualcomm relies on revenue growth as its own Android Handset customers are invading former users of Huawei phones, which have been pushed out of the headphone market by Washington sanctions.
Kevin Crewell, chief analyst at TIRIAS Research, called it a “political minefield” because of growing tensions between the United States and China. But Amon said the company could do business as usual there.
“We license our technology – we don’t have to do forced joint ventures with technology transfers. Our customers in China are aware of their agreements, so you see respect for American intellectual property,” he said.
Another big challenge for Amon will be to stick with Apple as a customer. Qualcomm’s modern chips are now in all Apple iPhone 12 models after a bruised legal battle. Apple sued Qualcomm in 2017, but eventually dropped its claims and signed chip supply and patent license agreements with Qualcomm in 2019.
Apple is already designing chips to replace Qualcomm’s communication chips in iPhone devices.
“The biggest overhaul for Qualcomm’s long-term stock is the concern that it’s currently as good as it gets because they ship in all iPhones, but one day Apple will make these chips internally,” said Michael Walkley, a senior analyst at Canaccord. Genuity Group.
Amon said Qualcomm has decades of experience designing modem chips that will be difficult for any rival to replicate, and that the gap in the Android market left by Huawei creates new revenue opportunities for Qualcomm.
“Only for the premium level, Huawei’s address market is as large as Apple’s ability for us,” Amon said.
Another challenge for Amon, a sociable CEO who is energetic on stage during keynote presentations, will be that Qualcomm is not well known to consumers in the way Intel or Nvidia are, even in Qualcomm’s hometown.
“I flew into San Diego and took an Uber driver at the airport and told him I was going to Qualcomm. He said, ‘You mean at the stadium?’ “, Said Crewell, referring to the football arena, which used to be home to chargers in San Diego.
Amon has launched a new branding program for the company’s Snapdragon smartphone chips to try to change that.
“Today we have a mature smartphone industry. People are interested in what’s behind the glass,” he said.
© Thomson Reuters 2021