How are we going to evolve? Any takers?
12 replies (most recent on top)
in hell
I like this option. Qualcomm spends 40billion or so and acquires ARM to bolster it's royalties/patent portfolio. And no, qualcomm massive layoff won't crater north county real estate. Not many QC engineers can afford to live their now these days anyway, so the majority of folks in North County aren't QC engineers, unless they are a dual income household, or an exec which won't be affected by a layoff. Biotech companies like Illumina have been doing much better than QC. Ditto could be said for doctors and lawyers that live in North County. Just saying.
The 820 better run circles around Samsung's app processor. The entire purpose of buying Atheros was to have a one-platform strategy of LTE Modem+Snapdragon+connectivity and lock out other vendors. Until we can get back in there, we're going to have a tough time selling just part of the solution at Samsung because with the exception of Snapdragon and LTE modem, the rest of our stuff is so-so (not best in class). It probably explains why those "other' companies actually had a great quarter: NXP/Broadcom/Intel.
Hardware/chip sale is starting to saturate. The bulk of the innovation has already happened, with successive iterations more like "refinement" than breakthrough. This isn't a Qualcomm specific problem. It's industrywide. So, the next step is, all the "me too" players are going to try to compete on cost. When the differentiator between the best solution and the next best solution is not that significant, it's a big problem for the market leaders because we stand to lose market share to cheaper but "good enough solutions". Again, this isn't a Qualcomm specific problem, but industrywide. The only difference between Qualcomm and other semi conductor companies is that we were able to keep our exclusivity on LTE/app processor much longer than most other players in their respective segments. But now, we're going through exactly what every other semi company has gone through. Every other semi company that plays in the space is already doing the best they can to diversify beyond the smartphone/tablet market because everyone knows that the writing is on the wall in terms of growth. That's why there is this big push into IOT and automotive by every player. But, I think the bulk of the growth isn't going to be from chips, it's going to be the software. And unfortunately, Steve dumped/is dump most of the software innovation team here at QC, because he wants to focus exclusively on chip. Personally, I think that's a bad idea, since software is what is going to sell hardware when the market starts to saturate, but then again, he must know best.
Qualcomm = Digital Equipment Corporation or Sun Microsystems or ... et cetera (in less than 5 years).
In the toilet.
Scenario 3: Qualcomm splits off and sells less profitable divisions. QC innovation budget is cut mercilessly because projects failed to show a profit within the three year goal set by MBAs in upper management who still have problems using Windows 8. All the really talented engineers who didn't buy a house in CV at peak prices in 2006 will bail by the end of 2015. Company limps along from income produced by investments in other companies' cutting edge products. Rumors of BK drift from certain offices.
Quintel.com is taken. Rats! there goes my golden ticket. I'm still confused why everybody doubts Intel mobile. Yet analysts cream their shorts when talking about ARM microservers.
I think Anonymous94307 nailed it. This is the where it starts going downhill. I think we will continue to see yearly reductions in workforce to compensate for reducing profits. I don't think they would need 25000 employees to support the Xiaomis and Oppos of this world. 15000 would be adequate I think. Time to clear the dust off the resume boys
Scenario two. Q gets rid of the deadwood , focuses on bright instead of cheap in its new workforce, and gets trimmer.
It starts it's own phone line with a high end quality product like it knew how to make once, and blows away Apple and Samsung.
Stock goes through the roof as every case, phone and appliance are made with "snapdragon inside". Eventually Q buys the wreckage of Samsung, Apple is second tier, and you get to tell your grandkids as you take them to Rome in you flying snapdragon car to buy some artwork from Vatican city that you were there when it all started.
You mean Xiaomi?
@Anonymous94307 - this is brilliant
This above scenario is based on the assumption that Samsung n Apple. are going to be only two phone manufacturers
How about other player xiomi comes in....,
One scenario is that QCOM works like heck to get the 820 out, and does, but by that time, Samsung has also made progress on their chip and its good enough for their purposes, so there is little reason to move, esp considering their cost savings. They then take their previous generation chips and start selling them to lower end phone manufacturers, further eroding QCT's position. MediaTek and others continue to edge up and QCOM, while still having a large market position, has no where near the lead that they once did. All the while, they continue cost optimizing things to make their numbers. In parallel, new projects will be started to help diversify their position, but nothing comes up as a home run (which shouldn't be a surprise, given their past record). QTL continues to print money, but Korea pulls a China and QCOM has to cough up another 1B and accept further reduced royalty rates. At this point, other major governments realize they can extort QCOM and well, and try similar efforts. Continuing investor pressure starts to make a break up look more attractive, since selling off QCT to Intel will be the only way that QCOM can compete with Samsung. The break up will occur, and the QCT portion will be rebranded as Qualcomm-Intel. At that point, Intel will come in and do another round of layoffs between the QCOM guys and their wireless guys, but they will finally have their prize. Employees will burn out, executives will get golden parachutes, layoffs will crater property values in CV, but it was a good ride while it lasted.