Qualcomm in recovery position following annus horribilis
- Reference: 1698930908
- News link: https://www.theregister.co.uk/2023/11/02/qualcomm_in_recovery_position/
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Smartphone recovery that's always around the corner is around the corner [1]READ MORE
[2]Financial results [PDF] for the year ended September 24 weren't easy reading for staff or indeed shareholders.
Revenue plunged 24 percent year-on-year in Q4 to $8.63 billion, including a 27 percent decline in the Handsets division to $5.45 billion, a 31 percent drop in IoT to $1.38 billion, and 15 percent growth in the relatively small Automotive business unit to $535 million.
The sales generated by the chipset business "reflect a more stable Android handset environment," Qualcomm CEO Cristiano Amon told a conference call with analysts.
According to IDC, smartphone shipments into the channel declined 0.1 percent in calendar Q3, the slowest rate of decline for many quarters, indicating that inventory in the supply chain is at a more "healthy" level, "although macroeconomic uncertainties linger."
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Qualcomm CFO Akash Palkiwala noted that IoT demand was suffering "softness" from industrial customers, yet Automotive posted its 12th straight quarter of double-digit gains.
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Executives spend a significant portion of these conference calls convincing Wall Street of the opportunities that lie ahead. In the case of Qualcomm, Amon talked up "a requirement over the next few years" for on-device GenAI in mobile phones.
"Our Snapdragon platform is highly differentiated from its competitors. First, we significantly increased the AI processing performance in power efficiency of our best-in-class NPU, CPU, and GPU," he said.
[6]Intel CEO Gelsinger dismisses 'pretty insignificant' Arm PC challenge
[7]Teardown reveals iPhone 15 to be series of questionable design decisions
[8]Post-IPO, Arm to push purpose-built almost-processors
[9]Apple extends Qualcomm contract to 2026 as homebrew 5G chip dream still on snooze
"Second, we are collaborating with multiple partners in ecosystems to enable a host of consumer productivity based AI models running natively on our platform. Third, we're enabling multibillion parameter Gen AI models to run continuously and concurrently for multiple use cases, including multimodal."
More recently, Qualcomm announced its intent to sell the Snapdragon X Elite platform to PC makers, posing a threat to Intel and AMD.
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"The Snapdragon X Elite includes our first implementation of the custom [11]Oryon CPU , which exceeds the multithreaded CPU performance of any x86 or ARM competitor in its class. It also matches the single-threaded CPU peak performance of the leading x86 CPU competitors at 70 percent less power," the CEO added.
In networking, Qualcomm is heavily pushing its Wi-Fi 7 kit.
For the year, turnover was down 19 percent to $35.82 billion: Handsets fell 22 percent to $22.57 billion; IoT was down 19 percent to $7.55 billion; and Automotive grew 24 percent to $1.87 billion.
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Total operating expenses dipped by around $300 million to $28.03 billion compared to Q4 2022.
Qualcomm previously revealed in the [13]prior quarter that leaner trading conditions meant it would need to reduce costs, and last month confirmed it was [14]ditching 1,000 staff .
Sales for the next quarter are forecast to be between $9.1 billion to $9.9 billion, or $9.5 billion at the mid-point. This is higher than analysts estimated. ®
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[1] https://www.theregister.com/2023/06/01/smartphone_industry_struggles/
[2] https://d1io3yog0oux5.cloudfront.net/_3f16d02223b493ad17154208f479612f/qualcomm/db/773/7349/file/FY+2023+4th+Quarter+Earnings+Release.pdf
[3] https://pubads.g.doubleclick.net/gampad/jump?co=1&iu=/6978/reg_onprem/systems&sz=300x50%7C300x100%7C300x250%7C300x251%7C300x252%7C300x600%7C300x601&tile=2&c=2ZUPVvj8coPNX7vGUnahwaAAAAFI&t=ct%3Dns%26unitnum%3D2%26raptor%3Dcondor%26pos%3Dtop%26test%3D0
[4] https://pubads.g.doubleclick.net/gampad/jump?co=1&iu=/6978/reg_onprem/systems&sz=300x50%7C300x100%7C300x250%7C300x251%7C300x252%7C300x600%7C300x601&tile=4&c=44ZUPVvj8coPNX7vGUnahwaAAAAFI&t=ct%3Dns%26unitnum%3D4%26raptor%3Dfalcon%26pos%3Dmid%26test%3D0
[5] https://pubads.g.doubleclick.net/gampad/jump?co=1&iu=/6978/reg_onprem/systems&sz=300x50%7C300x100%7C300x250%7C300x251%7C300x252%7C300x600%7C300x601&tile=3&c=33ZUPVvj8coPNX7vGUnahwaAAAAFI&t=ct%3Dns%26unitnum%3D3%26raptor%3Deagle%26pos%3Dmid%26test%3D0
[6] https://www.theregister.com/2023/10/27/intel_q3_2023/
[7] https://www.theregister.com/2023/09/26/iphone_15_teardown/
[8] https://www.theregister.com/2023/09/15/arm_post_ipo_strategy/
[9] https://www.theregister.com/2023/09/12/qualcomm_apple_deal_extension/
[10] https://pubads.g.doubleclick.net/gampad/jump?co=1&iu=/6978/reg_onprem/systems&sz=300x50%7C300x100%7C300x250%7C300x251%7C300x252%7C300x600%7C300x601&tile=4&c=44ZUPVvj8coPNX7vGUnahwaAAAAFI&t=ct%3Dns%26unitnum%3D4%26raptor%3Dfalcon%26pos%3Dmid%26test%3D0
[11] https://www.theregister.com/2023/10/24/qualcomm_x_elite/
[12] https://pubads.g.doubleclick.net/gampad/jump?co=1&iu=/6978/reg_onprem/systems&sz=300x50%7C300x100%7C300x250%7C300x251%7C300x252%7C300x600%7C300x601&tile=3&c=33ZUPVvj8coPNX7vGUnahwaAAAAFI&t=ct%3Dns%26unitnum%3D3%26raptor%3Deagle%26pos%3Dmid%26test%3D0
[13] https://www.theregister.com/2023/08/03/qualcomm_q3_2023/
[14] https://www.theregister.com/2023/10/13/qualcomm_layoffs/
[15] https://whitepapers.theregister.com/
Re: Saturated market, or do we really want it ?
"I can see them making inroads into the CPU market and server class, now that can get interesting"
It should. With the big two, Apple, Qualcomm, and Nvidia all making a claim for this space (and that's before Korean chip makers decide that simply stamping out the silicon and their own phone CPUs is no longer enough). If you end up with five or so suppliers with equal-ish technology then the market is commoditised and margins fall. Or they're nowhere near equal and all but a couple will have to admit defeat.
Re: Saturated market, or do we really want it ?
China is a huge market that's now effectively closed to American suppliers. Its not that all parts are restricted but given the reach and momentum of the entire administrative apparatus you can't rely on US suppliers any more so in addition to the lost market for advanced chips you'd expect the market for commodity parts to decline as well.
IoT I can't figure out at all. It seems an attempt to hijack existing industrial automation techniques, replacing long standing industry standards with far less reliable and potentially proprietary web based communications. Qualcomm hasn't been a player in the industrial market space so effectively has to break into this ecosystem with improved. technologies and practices. Wireless isn't that useful in a factory -- I personally have built prototype servos that had wireless connections,they worked** but I'd be reluctant to use them a live application (and certainly don't want them connected to any significant machinery). Remote sensing might be a better opportunity (e.g. so-called Intelligent Meters) but they're really a tool for marketing types who are trying to figure out how to sell the same amount of power at a significantly higher price (and they rely on a potentially unreliable communications medium -- and you can't keep changing out your equipment every year or so like you're encouraged to do with smartphones).++
(Industrial and automotive is a different world to business / entertainment computing which is why you never see references to companies such as Texas Instruments on this website.)
(**We're talking industrial servos, not the smaller devices that you'd find in a model aircraft. The boundary between the two sorts is a bit blurry.)
(++Utilities have been using remote sensing and control for decades. They couldn't run a grid without it.)
Low power is a differentiator
For mobile devices, low power is sorta obvious.
But even for desktops and datacenter, we are getting to a point where the power starts to be a real issue.
Apart from the electricity costs, all the noise created by the cooling solutions is just obnoxious.
The alternative is direct liquid cooling, with its own set of problems (and costs).
Here is where Qualcomm has a real chance.
NVIDIA has gone too much into the "high power" business lately, so they are likely vulnerable, too.
Re: Low power is a differentiator
I'm sensing a mild buy signal?
Saturated market, or do we really want it ?
So the mobile market is saturated and unless there is something really impressive to come along, upgrades are only incremental now and not worth the issue. Same as desktops / laptops. A few years ago you always wanted the latest and greatest CPU and RAM with options as there was a real benefit. These days not so. If you had a SATA spinner, an SSD one was worth it, but you could do it. Now, the processors are mainly about power saving and the step from SATA to Nvme is one of the faster upgrades you will get.
Wifi-7. I'd settle for something that is slow, but can go through more obstructions. Who cares if Wifi-7 may offer 1GB (or whatever it can claim to do). I don't use 1GB wired. I'd settle for a Wifi that can get from my office and around my whole house with speeds of 50-100Mbps and not needing me to implement a mesh or powerline to achieve this.
I can see them making inroads into the CPU market and server class, now that can get interesting