It has been difficult to move around in 2018 without encountering anyone with a Qualcomm Snapdragon 845-powered smartphone. The success the company has seen in capturing most of the Android market has been exciting for executives and helped accelerate a large number of usage cases and experiences for users. With the 2019 fast event and Qualcomm recently announced both its new Snapdragon 855 Mobile Platform and a good deal of its next generation 5G partnership, we could spend some time with Cristiano Amon, President of Qualcomm, on the latest developments and upcoming opportunities for [CristianAmon
Cristan Amon is one of the few public faces of the otherwise very distinctive Qualcomm, which appears on stage at all major announcements since becoming president of Qualcomm in January 201
The company's announcements at its annual Qualcomm Snapdragron Tech Summit this year are based on 5G partnerships worldwide, along with smartphone vendors and OEMs who will use the next generation Snapdragon 855 SoC in a good number of 2019 Android flagships, some of which can also include the X50 5G modem. With all this in mind, the subjects I wanted to cover with Cristano, including 5G for the masses, both in terms of mid-range but also suburbia deployments, and then through to how Qualcomm expects 5G revenue to grow and in what timeframe.
Many thanks to Cristiano and his team for the interview and their time!
Ian Cutress: Qualcomm is the market leader in 5G distributions and testing, with commercialization through 2018, 2019, 2020 and beyond. Can you draw any parallels between how long it took 4G to be profitable for Qualcomm and will it accelerate with 5G?
Cristiano Amon: If I draw a parallel, the first ramp starts at 4G, especially before the years the market had concentrated, as we now have a concentrated market and some geographic countries are mixed, each There is a significant increase in revenue and profitability for Qualcomm. We increased the rating dramatically under the 4G ramp, and it also came with the smartphone turned into a mobile data processing unit. That's why when we invested in 4G, we took time to invest in the underlying technologies you see in Snapdragon. The same will happen with 5G.
When we look at 5G, I think we see it with excitement. I think we expect to see this as a significant economic event, especially in its contribution to earnings, from 2020 onwards. We will start ramping in 2019, but by 2020 we see significant volumes.
But, as I said in the keynote, this is a little different than 4G for some reasons. This is a moment in the industry that mobile (and mobile hardware) also goes into other industries. So for Qualcomm, it is not only an opportunity to expand revenue and earnings as the landscape changes, but it is also an opportunity for our product and licensing businesses as we expand to IoT and the automotive industry on networks etc. All these different areas are improved with cellular technology – it's not just an expansion of the semiconductor business, but also the licensing business as well.
IC: Do you never expect to give 5G revenue separately for everything else?
CA: Not Special. We have been very careful when we consider our financial guidance. Now we give a quarter of a guide. But it is quite reasonable to say that the next step when we think of segment reporting is how we do it. We have highlighted the last two years how we have begun to take mobile technology to other markets, such as ACPC, to diversify the company. For that purpose, we have built a large car pipeline, and we go into the IoT and all these things. We said in 2018 that these extensions would represent a $ 5 billion business for Qualcomm. Over time, since this continues to grow for us, I see the logic in us to report a split between mobile and non-mobile. 5G in mobile for us will be a very big first wave, and significantly economical in 2020.
IC: There is a major China Mobile 5G event coming soon and we have recently had an event in South Korea. How much penetration does Qualcomm have for his own brand at such demonstrations?
CA: I would like to say that China, especially China Mobile this week, will see you a repeat 5G, but with a very "China Mobile" scale. You will see our 5G customers talk about their 5G readiness with pre-launch. I want to say that China's consumer, especially in China, is much more technically knowledgeable than most. In China, we have two things that happen to us: First and foremost, there is a lot of recognition for Snapdragon. When you think of unaided attention with the consumers, one of the biggest we have China with Snapdragon. Also with our direct customers in China, they emphasize Snapdragon as one of the main features. One of the best examples is the Xiaomi Mi 8 Explorer edition with a clear backing that shows the chip. I expect this to continue. If anything, we will give more Qualcomm brand exposure than we have before.
In addition, the fact is that our technology goes to other industries. No doubt – the consumer market is the biggest one right now! But even though we are in the consumer segment, we stand behind the glass on devices and there is no space for stickers on the front. We still get recognition there and you have started to see the move to PCs and other things, there are other vectors to bring the Qualcomm brand and technology to the front and I expect it to increase over time.
In formula 1, we sponsor the Mercedes team. Currently, we have a Qualcomm logo on the car. Next year, changing to a Snapdragon logo.
IC: When will Qualcomm make an event on an F1 race?
IC: With the current distribution of 5G modems like the X50 as an external modem to SoC, we should expect some discrepancies in other aspects of the device due to the increased chip count and range claim?
CA: What you think is the biggest way out is not the biggest! The biggest distance with much is that when we add mmWave, we need to have more antenna arrays. If anything, there is much more pressure in the companies with expertise to handle RF integration with power saving. Within a device, you must have a limited [PCB] footprint, a lot of RF, all existing RF bands, then the 5G tapes, plus adding the antennas, and still have to accommodate the battery.
It's logical for us to do the external modem as a separate chip first, as this is what we've done in every previous generation of wireless. The reason is that we have a flagship product that is being done every year, but we announced the X50 modem in 2016. As a creator of standards, we need to bring this technology to the market. We must make many points of view. We do a lot of interoperability tests to mature technology to get to this point right now. By having an external modem as our first product, it allows us to concentrate on the development of 5G as we continue to update our Snapdragon technology every year. We want a merger solution that combines SoC and the modem with time so you should not be surprised that technology is getting ripe and technology scales with all the combinations you have 5G. You will never see Qualcomm batting against integration.
Having said that, in addition to the X50 on the board, as well as RF front end capabilities, we've seen a lot of competition about the floor plan inside a smartphone. That is why we are very proud of QRD (Qualcomm Reference Design), as it shows the total integration level of 855. Suppliers have the ability to feel safe about power consumption and how much we can do with the design of RF and still maintain form factor of a flagship. When the first 4G devices came on the market, OEMs had questions about the size of the devices and the devices were very hungry – well, the phone was also an immature platform. Many usage cases were not there and the Play store was not ripe. We do not have that problem this time. So the bar for us, and for our smartphone OEM customers, is very high. That means, unless I give you a similar device to what you have now, you will not take it. It therefore seems that you have seen more evidence about this technology, about 5G, through 2018, than what we saw at the beginning of 4G.
IC: With Qualcomm's skill in wireless technology and delivering high performance chipset to mobile platforms, is a familiar question that we get, when should we see Snapdragon with the same core business as and Apple chip & # 39 ;. Let me change this question a little: Given that Apple users have another ecosystem, do you see the performance of A-Series processors a threat to how widely Snapdragon is in a smartphone, or are other Android-based competition players the most important competition?
CA: If I go back in time when we launched 4G, we knew that in order for technology to succeed, you had to develop and figure out in many cases the basic technology to let the phone become a mobile data processing platform. Therefore, we were the first company to have a> 1 GHz clock frequency in a low-powered CPU. We did not get it from the Arm Ecosystem, so we had to completely rework the micro architecture, and we did it for a number of years.
Soon we realized that in a battery operation is not like a PC. You can not just put a large CPU, a big GPU, and then add more graphics power, more memory – everything matters. As the hardware has evolved, we realize that for single-click performance on the CPU, we are in a place that is good enough for all applications needed, and the vector of innovation must come from other areas. For treatment, this means things like GPU for machine learning. I would argue that when you look at our Adreno GPU matrix, especially our per square millimeter (of door area) performance, or our performance per watt, whether compared to Mali or PowerVR or anything else in mobile, we surpass all of them. We are the reference point for the industry in graphics performance. We want it to be the same for our AI engine.
Frankly, for single threaded performance, I have to ask you this: is it a particular program that we can not deliver best in class placement already from single performance with Snapdragon today. So is the question: Are we innovative in the other areas that are more different and highly differentiated verse contests? The way I think is that with the simple CPU-centric architecture and single threaded performance – we moved past it a while ago, and we feel that Arm does with the adaptation of Arm, delivering what we need. At the same time, silicon becomes equally important, if not more than ever, and several areas of data processing develop into the phone, therefore we work with GPU, Hexagon and DSP.
IC: The focus for Qualcomm and its partners today was primarily focused on 5G NR for dense urban environments but there was some mention of activating technologies like telemedicine for suburbs and rural communities. How do you see 5G NR propagating against and outside the suburbs?
CA: Two things. I think 5G is designed to be a combination of both sub-6 GHz and mmWave standards. The solution is not just the one or the other. I think it was a mistake in the beginning for people to do just one or the other. It's all about both.
You need mmWave as you "close" the network to get higher speeds and higher speeds at lower latency for use of edge computing. Sub-6 GHz will be an implementation of the macrocell type. You still see significant improvements in speed and latency as some of the simulations have shown. You will also have coverage. But it does not stop there with the 3.5 GHz band. In the United States, you see Sprint talking about the 2.5-2.6 G band. But companies such as T-Mobile speak much lower frequencies that will propagate very well. I think that the sub-6 GHz distribution architecture is likely to go 1: 1 on existing sites and will provide coverage. The reason we spent as much time as a company talking about gigabit LTE and LAA is because of that transition. Like all the wireless transitions, it will not be a hard handoff – you will coexist with these systems and as the new applications are developed, you will still be able to drive it when you hand over 4G. The service stops not only with a new technology in place.
On the other hand, to your question – it is this particular usage case that becomes very important in many broadband carrier models, especially in suburban areas. The usage is, for both sub-6 GHz and mmWave, in the suburbs as the very last mile of fiber to the home. This eliminates the need for a wire that actually enters the property.
I also think that a few things will happen. It's a hard thing for people to understand right now, but in the current television architecture there is one thing that 5G in this usage allows to have enough bandwidth and reliability to do things that are important for real time. If you look at a pay-per-view sports game and suddenly you have a buffering connection, you're going to be mad – if you pay for live content, you'll see it in real time. Well, with speeds and reliability for 5G, there's no reason for this fixed line to continue – you can get 5G directly to television. So it adds to this thing about broadband.
What Verizon showed in the demonstration video, we have the very elegant solution at Qualcomm. We can improve the fixed broadband usage for many of the operators, and it is now a part of the products being built. You have probably heard from us throughout the year about how successful we are in retailing with Wi-Fi Mesh. The easiest thing to do, especially when you have situations when users are in apartment homes and different types of distributions, as Verizon showed with mmWave, is that you associate it with Mesh, and the network takes you. So even if you have an outdoor hub, and you're skeptical that the 5G signal will not propagate well inside the property, but in this case it does not matter because of the network. It may even be self-installed, for example, with Netgear Mobile Hotspot, and then the network will take you. When I think of broadband transport business in surburban areas, the combination of 5G and network technology significantly increases SAM and the viability of the use.
IC: How does Brexit affect your relationship with carriers or handset in UK and Europe?
CA: Not at all. Nobody has approached us this as a problem and we see no influence. If anything, we look very fast for wireless in both the UK and Europe. I spoke to the regulators who have had round tables with the CEOs and the European Commission, and obviously there is a lot of excitement in Europe between the rules of the new telecom code in all of this. But I would say that we generally saw huge activity in Europe to launch 5G at the same time across the continent. It's not just in the UK, we see it in Germany, in Italy, in France. France has problems with 3.5 GHz (sub-6 GHz), so France can be a big surprise in mmWave. But I think everyone moves to 5G. They are willing to work through all regulatory issues to make it done. I think the CEOs are very positive in 5G and they want to get some excitement in the telecom sector.
IC: We saw in the demonstration room Motorola 5G mod for z3, and we were told to mute like a Snapdragon 855 in addition to an X50. This was also true with the two mobile hotspots from Netgear and Inseego. Will the X50 modem be available to other non-855 SoCs, or are the two basically bound for 5G?
CA: At CES we will start talking about 5G past smartphones, such as the car space and the IoT room. You will see different implementations for our new chips because one of the things we want to do with 5G is to bring many modules to the market because we will take it to industrial applications. You will see both. You will see 855 launches without X50 in 4G and emerging markets, but you will also see data-centric devices without 855 as well.
IC: From the announcements of 5G for 2019 and 2020, how long will 5G remain a premium product? When should we expect it to enter the medium-sized mobile market?
CA: The 4G transition was very successful for Qualcomm and we want 5G to be the same – our goal was to get 4G to scale as fast as possible. As I have said, 2020 is significantly more economical for 5G, but you should expect that industry by 2020 will take 5G to the usual. Stay tuned – From a Qualcomm perspective, I think we are better prepared than with 4G, and we will get 5G to the lower levels as fast as possible. This is especially true because of both the possibilities of mobile and the possibilities outside of the mobile phone.