Qualcomm CEO Cristiano Amon crystalized the company’s market diversification strategy during an annual meeting with investors in New York on Tuesday, pointing out opportunities to expand revenues based on a projected 7x increase in Qualcomm’s addressable markets valued at $700 billion in a decade.
The bullish forecast led to a 7% surge in Qualcomm stock on Tuesday.
Among several markets including smartphones, PCs, and IoT, he focused significantly on upcoming opportunities in automotive, and announced a collaboration with BMW to provide the Qualcomm Snapdragon Ride Platform to the carmakers next-gen ADAS (Advanced Driver Assistance Systems) and AD (Autonomous Driving) platforms. Qualcomm now works with 25 different vehicle OEMs, providing Snapdragon chips and software for autonomous capabilities.
BMW’s next-gen Automated Driving tech will be based on the RIDE vision system-on-chip, computer vision and ADAS central compute SoC controllers managed by Qualcomm’s Car-2-Cloud services platform.
Amon also announced a smart city entertainment initiative for New York’s Times Square with developer L&L Holding for a TSX Broadway project that will provide indoor and outdoor smart venues, smart retail and a smart hotel based on 5G and Wi-Fi 6 networks based on Qualcomm gear.
The project will be supported by partners Zyter and Veea with a central control and command center and will enable augmented reality for immersive content for dining, retail and entertainment as well as hosted multiplayer virtual reality and digital gaming with live audience participation. It will be unveiled in late 2022. No cost estimates were shared.
With such projects and more, Amon told investors, “We have an incredible opportunity to grow seven times in the next decades” to a $700 billion addressable market opportunity. “We’re truly at the beginning of one of the largest opportunities in our history.”
Qualcomm’s message of moving beyond Snapdragon chips for mobile connectivity has developed over the years, but Amon broke down the addressable market opportunities into technologies for handsets, RF front end, automotive and IoT. He later defined the four most significant opportunities for Qualcomm as the convergence of mobile in PCs, the metaverse for various applications, wireless fiber and then industrial IoT.
“We are now diversified across many large additional markets,” he said. “The time for Qualcomm is now [with] one roadmap across every growth opportunity…We will always be the company defining the pact of innovation in mobile. We are no longer defined by a single end market and single customer relationship…
“It’s not enabled by 5G alone, but how we define 5G that connects everything to the cloud 100% of the time…We’re positioned at the intersection of all these trends.”
To emphasize the importance of the cloud in the overall strategy, Amon pointed to Qualcomm’s partnership with Microsoft and played a video from CEO Satya Nadella. In the video, Nadella said the past 20 months during Covid has created a “wave of digital transformation” moving from the “mobile and cloud era to ubiquitous computing and ambient intelligence.”
That transformation will support precision medicine, agriculture, and education among many sectors.” This is all just the beginning,” Nadella said.
Amon underscored the cloud’s importance: “If you believe in the growth of cloud, you believe in the Qualcomm growth plan.”
The automotive opportunity for Qualcomm is based on Qualcomm’s comprehensive Snapdragon “digital chassis” for vehicles, Amon said. “We have bene building a solution that meets demands for technology as the car is transformed,” he said.
He predicted cars will be connected 100% of the time for access to media and gaming and called out Qualcomm’s recent purchase of the Arriver business from Veoneer to focus on computer vision, drive policy and driver assist tech.
“Qualcomm plus Arriver allows a scalable, open and proven platform for ADAS and autonomy,” Amon said. “We’re getting a lot of traction and the market is paying attention. It’s a comprehensive platform that is open and allows OEMs to innovate. BMW is just the beginning. We have an incredible opportunity to scale very fast.”
Qualcomm foresees a 10x market growth opportunity for Qualcomm Snapdragon chips and software across auto telematics, digital cockpit and ADAS. Snapdragon chips will bolster car-to-cloud connectivity, the Ride platform itself (with Arriver), auto connectivity to 5G and the cockpit platform to enhance the in-car experience for driver and passengers. The 10x opportunity for growth is based on the $100 market opportunity today per average car, with variations among high and low-cost model cars. All told, that could mean $8 billion in sales in the next decade for the automotive business, up from less than $1 billion in 2021.
Qualcomm CTO James Thompson said AI processing with Qualcomm chips will help vehicles sort out what data goes back to the cloud or is processed on the vehicle. “You can’t send all the data back to the cloud,” he said. “Some has to be processed at the edge.”
In one example, he said a vehicle might be processing 15GB per second from various sensors. “You can’t send that back to the cloud and you don’t want to wait for the time to send it to the cloud.” For 15GB of data, that transfer might take 100 milliseconds, which would be enough for a vehicle to move 20 feet, taking too long to verify if an image is a pedestrian crossing the road.
“In a system design, a lot is processed on the edge and a lot is also processed in the cloud,” he said. “The point is certain things must be on the edge of the network.”
Qualcomm has been developing accelerators for AI for a decade and is capable of provide twice the performance half the power of competitors, he said. “I feel really good about the hardware we have.”
Qualcomm recently reported fiscal 2021 earnings of $33.5 billion. The company’s auto business remains its smallest category for chip revenues, at $270 million in the fourth quarter, compared to $7.7 billion for all chips in the quarter. Even though it is small, the auto business grew 44% over a year ago.
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