Qualcomm has so far proven to be one of the most successful mobile chipset manufacturers in the world and last year celebrated that there were one billion Android devices running the operating system, over a Qualcomm System-on-Chip, or SoC. Despite the business having some difficulties in the short term, mostly centred around the rumors and reputation of the Snapdragon 810 processor, the company continues to supply many companies but its two main businesses are Samsung and Apple. This stands to reason as these two juggernauts in the smartphone and tablet world have largely carved up the market by themselves, leaving the rest of the field to fight over the remainder. And to a point, Qualcomm is as much a victim of its own success (at building competent, high performance chipsets) as it is of both Apple and Samsung building devices that the public wish to buy. It’s a problem for Qualcomm but unless things change, it is a good problem to be in – however, as history constantly reminds us, things can and do change.
Since 2012, we have seen the share of Qualcomm’s revenue attributed to Apple and Samsung grow from 38% (2012) through 43% (2013) to 49% (2014). What will happen in 2015? We know that Samsung adopted their own internal Exynos 7420 chipset, rather than the Qualcomm Snapdragon 810 and this will have an impact on the business, but whilst Samsung are a major customer there are many other companies out there using Qualcomm as their main SoC provider. It remains to be seen how many contracts Samsung switch from Qualcomm to their internal Exynos chipset; the rumored Galaxy S6 Mini appears to be based around the Snapdragon 808 processor, so the signs are that there is no great switch just yet. Nevertheless, Qualcomm must be nervously considering the implications of this change from Samsung. As regards the Apple connection, Apple exclusively use Qualcomm modem or baseband chips in their mobile devices and here a switch away from Qualcomm to a competitor would be bad news. But would it be disastrous?
Qualcomm have anticipated this risk and have already taken steps to mitigate the risk. One example is how they are working and supporting Chinese businesses. We’ve seen Qualcomm setting up offices around the world with a remit to help localize smartphones based on a Qualcomm chipset for a particular region. Ultimately, not only is Qualcomm providing the chips for these manufacturers but it is also providing support to help sell more devices. It is also important to remember that whilst the Snapdragon might not be the darling of the mobile device world as arguably the Snapdragon 800, 801 and 805 processors have been, it will be succeeded by the Snapdragon 820 in due course, plus Qualcomm has a large and varied portfolio of lower and mid range System-on-Chips. And yes it’s true that some manufacturers have started to introduce competitor chipsets into their devices, such as Sony and HTC introducing MediaTek-powered devices, but we have also seen Qualcomm winning contracts from device manufacturers who have predominantly used other manufacturers, such as the Asus ZenFone Selfie moving away from the Intel Atom. The Snapdragon 810 is perhaps a turning point for Qualcomm which could see them diversifying their portfolio further and increasing their support for the emerging market smartphone manufacturers across the world.