How Does Qualcomm Plan to Serve the Future-Connected World?
Qualcomm’s efforts focused on the connected world
Qualcomm (QCOM) is proceeding with its acquisition of NXP Semiconductors (NXPI) to add microcontrollers to its portfolio and cater to the automotive and IoT (Internet of Things) markets. Moreover, the company is expanding its Snapdragon processors beyond Smartphones to other connected devices.
Qualcomm plans to focus the combined company’s technology, sales channel, and scale toward the larger growth opportunity of the connected world.
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On Qualcomm’s fiscal 2Q17 earnings call, its CEO, Steve Mollenkopf, talked about how the company would leverage its connectivity, computing, and security solutions to meet the future needs of the connected world. Below is a synopsis of his statements.
The 5G (fifth-generation) revolution will expand the mobile ecosystem beyond phones and connect multiple devices simultaneously.
In late 2016, Qualcomm unveiled the industry’s first 5G modem, Snapdragon X50. In February 2017, the company enhanced this modem by adding support for the global 5G NR (new radio) standard across the millimeter wave and sub-6 gigahertz frequency bands. It also made the 5G modem compatible with earlier 2G (second-generation), 3G (third-generation), 4G (fourth-generation), and 4G LTE (long-term evolution) technologies.
Qualcomm is conducting 5G NR trials with several global infrastructure vendors and operators, including AT&T (T) and Ericsson in the United States, Vodafone (VOD) and Ericsson in Europe, ZTE and China Mobile in China, SKT and Ericsson in Korea, and Telstra and Ericsson in Australia. With this, the chip supplier is looking to validate and commercialize 5G NR technology before 2020.
Mollenkopf expects the first 5G NR-backed commercial products and network to be launched in 2019. Qualcomm has partnered with Softbank and Sprint (S) for this purpose.
Focus on RF content in 5G devices
The advent of 5G will likely make RF (radio frequency) more complex, as several devices will have huge amounts of MIMO (multiple input multiple output) and multi-element arrays. Qualcomm has formed an RF front-end joint venture with TDK Corporation to develop advanced RF technologies that can be used in Smartphones, automotive, IoT, and other adjacent devices.
These 5G efforts will likely take at least two years to start generating returns. In the meantime, Qualcomm is expanding its reach and identifying emerging markets for its existing technologies to boost growth. We’ll explore this initiative next.