Qualcomm recently posted their latest set of earnings this week and they make for sombre reading. It’s bizarre to think of Qualcomm as a company that are in trouble, but that seems to be the exact sort of situation that they’re in right now. With reports of layoffs raging throughout parts of the Internet, it’s clear that Qualcomm isn’t quite as happy as they were last year. In fact, earnings took a drastic fall, year-over-year, by a sizeable 47% from $2.2 Billion last year, to $1.1 Billion this year. The company is currently undergoing some transformations, and with that could come around 4,500 job cuts as the firm looks to cut $1.4 Billion from their overall budget.
It’s interesting to look at Qualcomm, a company that the wireless industry practically depends upon to see what went wrong. There’s been a big hubbub over the Snapdragon 810 and that its overheating issue were to blame, and while that whole thing has probably been blown out of proportion, making nearly half as much money as the year before does not make Qualcomm seem like a healthy company. The octa-core game is one that Qualcomm failed to learn quickly, that much is clear. Even though Samsung’s Exynos chips have been absent from any high-end devices until this year, they knew what they were doing with octa-core technology. So did MediaTek, a relative unknown until a couple of years ago. While MediaTek was sowing up the mid-range and low-end markets in China, one of the most important on the planet right now, Qualcomm were all too wrapped up in telling people that quad-core was the way to go, and that octa-core CPUs just weren’t good enough. History is a cruel thing, and for Qualcomm, the fact that they ended up making their first octa-core CPU one that wasn’t “good enough” for Samsung, one of their biggest clients must really sting.
The Snapdragon 810 is a capable processor, but it’s nothing compared to the Snapdragon 800 and Snapdragon S4 Pro, both chips that put Qualcomm on the map (not like they weren’t already there, of course). The Snapdragon 800 series featured custom cores with special Qualcomm sauce, and they were great chips. Instead of looking to the future of octa-core chips, which was definitely where the grandfather of it all, ARM Holdings, was willing things to go, they stuck with quad-core chips. The Snapdragon 801 and then the Snapdragon 805 offered little in the way of performance upgrades, which suggested to the industry that they were working on something special. In fact, they weren’t. They ended up producing a generic octa-core CPU that anyone in the semiconductor game can produce.
It’s arguable that Samsung caused the biggest blow to Qualcomm, not being in the Galaxy S6, or a series of tablets from the South Korean giant, can’t have helped. Then again, MediaTek and the growing business overseas must have squeezed Qualcomm even further. There was a time when Qualcomm was the only manufacturer you could realistically head to in order to get a decent mobile processor that consumers would be happy with, that’s no longer true. To recover from this, Qualcomm will need to offer the industry and consumers compelling reasons to choose Qualcomm over Samsung or MediaTek. Let’s hope the 820 is the Snapdragon that holds all their fortunes.