Qualcomm’s fortunes seem to be dwindling as other vendors like MediaTek start to gain momentum.
In recent times, Qualcomm has been known to post a quarterly growth of 20 percent. However, it is facing a stiffer battle this year as more and more handset manufacturers are gravitating to MediaTek. While MediaTek’s silicon is not yet in*hardware that’s sold in the US, it’s widely used by Chinese as well as Indian manufacturers to power low-cost devices. MediaTek has also rolled out an eight-core SoC called the MT6592 that is seeing widespread usage. In addition, it is doubling down on LTE-enabled SoCs by launching the MT6595, which is the world’s first eight-core LTE SoC. MediaTek is also set to offer 64-bit SoCs in the MT6752, which is an eight-core offering consisting of eight ARM v8 Cortex A53 cores.
To counter the rising influence of MediaTek, Qualcomm has started offering eight-core SoCs. Qualcomm has staunchly stuck by its “better cores, not more cores” philosophy with its Snapdragon series, but has relented to market conditions and launched the Snapdragon 615, the vendor’s first eight-core LTE-enabled 64-bit SoC.
One might find it*interesting that Qualcomm went so far as to mention that the reason behind launching an eight-core SoC was that consumers in the Chinese market demand mobile hardware with more cores. Qualcomm marketing VP Tim McDonough said during the launch of the Snapdragon 615, “Consumers in China want octa-core. It’s very high on their list; while in the US and Western Europe, it’s totally other things that consumers want. So we’ve really recognized that if that’s what Chinese consumers want, that is what our Chinese customers, our OEMs want, and Qualcomm has to care for that need; so that’s what we’re doing.”
64-bit octa-core battle
Another interesting feature in Qualcomm’s latest SoCs is that they come with ARM’s stock Cortex A53 and A57 cores and not the Krait line of CPUs. All of Qualcomm’s offerings last year featured the Krait line, but this time around the manufacturer has mentioned that it would not be able to launch SoCs with tweaked CPUs until 2015. The issue seems to be in working with ARM’s new v8 architecture. While this would generally not be an issue, the lack of Krait cores means that Qualcomm is on a level playing field as far as MediaTek is concerned as far as the CPU is concerned.
In fact, MediaTek has a head-start in the eight-core LTE and 64-bit SoC segment, as mobile devices with its hardware will hit store shelves before Qualcomm. Another factor that MediaTek has going in its favor is that most local vendors from China and India use its hardware in their devices. The reason most manufacturers choose MediaTek is that its hardware is much more affordable than Qualcomm’s. MediaTek will look to take full advantage of that by offering LTE-enabled SoCs that OEMs could include in entry-level and mid-tier devices, a feat they would not be able to achieve if they were to choose Qualcomm’s hardware.
With the high-end smartphone segment plateauing in growth, manufacturers are targeting the mid-tier segment for increased revenue. This segment is set to witness a lot of change this year, as 64-bit LTE enabled hardware becomes widely available. Qualcomm’s inability to supply such hardware before others means that it will be starting on the backfoot. ARM said*in its earnings call that it is seeing increased revenue from v8 hardware, which includes the Cortex A53 and Cortex A57 64-bit cores. In all, ARM has mentioned that it has signed 30 licenses for its v8 architecture, which means that there are a lot of manufacturers vying to build 64-bit hardware.
It isn’t just MediaTek that Qualcomm has to worry about. Vendors like Nvidia, Samsung, LG, HiSilicon Huawei and Broadcom are set to launch 64-bit hardware later this year.
What about LTE?
Even though Qualcomm is facing a stern test from MediaTek and other vendors, it is still the market leader in LTE solutions. Its Gobi 9X35 series of LTE modems are used in most high-end mobiles available today. Other vendors like MediaTek, Samsung and Huawei offer LTE modems, but they are not at the same level as Qualcomm’s Gobi series. It is for this reason that most handset vendors, including Samsung, use Qualcomm’s hardware in their devices in LTE markets.
That situation might change soon if Intel has anything to say about it, as the Intel XMM 7260 might just be the only modem that can take on the Gobi series. The XMM 7260 offers LTE Category 6 connectivity, includes 22 LTE bands for global LTE and works on both LTE FDD/TDD networks, which means that it will work on China’s LTE networks. Handset vendors like Samsung have already started using the modem, Samsung’s upcoming Galaxy S5 Prime is said to include the XMM 7260 along with Samsung’s own Exynos 5430 SoC. Considering that Intel’s LTE modems are more affordable to OEMs than Qualcomm’s offerings due to Intel’s aggressive contra revenue strategies,*it is likely that other manufacturers will follow Samsung’s lead. That being said, one might question if Intel’s contra revenue strategies are sustainable; the board of directors might turf this program if it doesn’t get results quarter-after-quarter.
It remains to be seen as to how Qualcomm will face this challenge. The manufacturer has faced little threat last year, but with other vendors launching much better hardware, Qualcomm has had to react to changing trends rather than dictate them.
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Qualcomm posted its quarterly earnings Thursday, with the chipset vendor recording its smallest quarterly revenue increase in over three years. Stiffer competition in China and the stagnation of the smartphone segment have contributed to the low revenue increase. Qualcomm’s $6.37 billion revenue is a mere 4 percent increase from the same time last year, and has fallen short of analyst estimates, which were at $6.47 billion.
In recent times, Qualcomm has been known to post a quarterly growth of 20 percent. However, it is facing a stiffer battle this year as more and more handset manufacturers are gravitating to MediaTek. While MediaTek’s silicon is not yet in*hardware that’s sold in the US, it’s widely used by Chinese as well as Indian manufacturers to power low-cost devices. MediaTek has also rolled out an eight-core SoC called the MT6592 that is seeing widespread usage. In addition, it is doubling down on LTE-enabled SoCs by launching the MT6595, which is the world’s first eight-core LTE SoC. MediaTek is also set to offer 64-bit SoCs in the MT6752, which is an eight-core offering consisting of eight ARM v8 Cortex A53 cores.
To counter the rising influence of MediaTek, Qualcomm has started offering eight-core SoCs. Qualcomm has staunchly stuck by its “better cores, not more cores” philosophy with its Snapdragon series, but has relented to market conditions and launched the Snapdragon 615, the vendor’s first eight-core LTE-enabled 64-bit SoC.
One might find it*interesting that Qualcomm went so far as to mention that the reason behind launching an eight-core SoC was that consumers in the Chinese market demand mobile hardware with more cores. Qualcomm marketing VP Tim McDonough said during the launch of the Snapdragon 615, “Consumers in China want octa-core. It’s very high on their list; while in the US and Western Europe, it’s totally other things that consumers want. So we’ve really recognized that if that’s what Chinese consumers want, that is what our Chinese customers, our OEMs want, and Qualcomm has to care for that need; so that’s what we’re doing.”
64-bit octa-core battle
Another interesting feature in Qualcomm’s latest SoCs is that they come with ARM’s stock Cortex A53 and A57 cores and not the Krait line of CPUs. All of Qualcomm’s offerings last year featured the Krait line, but this time around the manufacturer has mentioned that it would not be able to launch SoCs with tweaked CPUs until 2015. The issue seems to be in working with ARM’s new v8 architecture. While this would generally not be an issue, the lack of Krait cores means that Qualcomm is on a level playing field as far as MediaTek is concerned as far as the CPU is concerned.
In fact, MediaTek has a head-start in the eight-core LTE and 64-bit SoC segment, as mobile devices with its hardware will hit store shelves before Qualcomm. Another factor that MediaTek has going in its favor is that most local vendors from China and India use its hardware in their devices. The reason most manufacturers choose MediaTek is that its hardware is much more affordable than Qualcomm’s. MediaTek will look to take full advantage of that by offering LTE-enabled SoCs that OEMs could include in entry-level and mid-tier devices, a feat they would not be able to achieve if they were to choose Qualcomm’s hardware.
With the high-end smartphone segment plateauing in growth, manufacturers are targeting the mid-tier segment for increased revenue. This segment is set to witness a lot of change this year, as 64-bit LTE enabled hardware becomes widely available. Qualcomm’s inability to supply such hardware before others means that it will be starting on the backfoot. ARM said*in its earnings call that it is seeing increased revenue from v8 hardware, which includes the Cortex A53 and Cortex A57 64-bit cores. In all, ARM has mentioned that it has signed 30 licenses for its v8 architecture, which means that there are a lot of manufacturers vying to build 64-bit hardware.
It isn’t just MediaTek that Qualcomm has to worry about. Vendors like Nvidia, Samsung, LG, HiSilicon Huawei and Broadcom are set to launch 64-bit hardware later this year.
What about LTE?
Even though Qualcomm is facing a stern test from MediaTek and other vendors, it is still the market leader in LTE solutions. Its Gobi 9X35 series of LTE modems are used in most high-end mobiles available today. Other vendors like MediaTek, Samsung and Huawei offer LTE modems, but they are not at the same level as Qualcomm’s Gobi series. It is for this reason that most handset vendors, including Samsung, use Qualcomm’s hardware in their devices in LTE markets.
That situation might change soon if Intel has anything to say about it, as the Intel XMM 7260 might just be the only modem that can take on the Gobi series. The XMM 7260 offers LTE Category 6 connectivity, includes 22 LTE bands for global LTE and works on both LTE FDD/TDD networks, which means that it will work on China’s LTE networks. Handset vendors like Samsung have already started using the modem, Samsung’s upcoming Galaxy S5 Prime is said to include the XMM 7260 along with Samsung’s own Exynos 5430 SoC. Considering that Intel’s LTE modems are more affordable to OEMs than Qualcomm’s offerings due to Intel’s aggressive contra revenue strategies,*it is likely that other manufacturers will follow Samsung’s lead. That being said, one might question if Intel’s contra revenue strategies are sustainable; the board of directors might turf this program if it doesn’t get results quarter-after-quarter.
It remains to be seen as to how Qualcomm will face this challenge. The manufacturer has faced little threat last year, but with other vendors launching much better hardware, Qualcomm has had to react to changing trends rather than dictate them.
Read More: http://ift.tt/1jV50Ov
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