In the highly competitive mobile processor market, it can be hard for vendors to differentiate themselves, especially from Qualcomm with its increasingly all-embracing platform. The rising level of competition has certainly spurred innovation and a heightened investment in new capabilities, but are all those dollars and brain cells being focused on the right target ‘ improving the user experience and supporting new services that users actually want? This year, there has been a sense that mobile chip designers have sometimes been engaging in games of ‘mine’s bigger than yours’, without assessing whether a bigger number (whether for cores, mips, MHz or bits) is really what is required.
Qualcomm has been notable for staying aloof from the scrabble to hit the big figures. Critics say this is the conservatism of an established leader who has no incentive to move the market, though that is contradicted by the US firm’s continuing determination to be at the cutting edge in modem technology. On the processor side, Qualcomm justifies its relative slowness by saying that it moves when the market requires it, not to hit headlines, and that vendors should concentrate on making their existing architectures as efficient in performance and power as possible. It let Nvidia steal the glory for being first to a quad-core mobile processor, and in octacore has done the same for MediaTek and Samsung.
It was taking a similarly sceptical line on the move towards 64-bit processors earlier this year ‘ but has now surprised the market by announcing its own 64-bit Snapdragon well ahead of its expected timescale. Even more surprising ‘ and, we imagine, to the consternation of rivals ‘ it is aiming that first 64-bit chip not at premium devices but at midmarket smartphones. The Snapdragon 410 modem/processor boasts a 64-bit CPU and integrated LTE baseband, but is targeted at sub-$150 handsets.
This shows Qualcomm doing what it does rather skilfully, calling competitors’ bluff just when they thought they had a genuine headstart on the incumbent. But it is also taking a risk to its own business model, by introducing the latest technology to mass market devices. This will certainly wrongfoot other suppliers on this occasion, but it threatens to rob itself of the honeymoon period for a new platform, when it is targeted at high end devices and therefore commands a high premium. By pushing 64-bit immediately into the midrange, Qualcomm will have to come up with something even more dramatic to justify a higher price for its top end Snapdragons.
However, Qualcomm will calculate that the window for charging a premium is narrowing anyway as growth shifts to emerging markets and users of midrange handsets demand high end performance. Operators and web players, too, want everybody in the world to have a powerful handset which will drive higher content and access revenues, which is starting to force a change of approach by device makers.
And Qualcomm knows that, with over half the smartphone market tied up by vendors with their own processors, hanging on to its market share will increasingly rely on success with the midmarket OEMs, as well as keeping a step ahead of MediaTek and the up-and-coming Chinese competitors.
Of course, Apple is a lost case in processor terms (though not modems), but Samsung is not ‘ it still uses third party chips as well as its own Exynos, especially in lower end smartphones. And although LG, ZTE and others are reported to be interested in commissioning their own handset processor designs, for now they remain strong prospects for Qualcomm, and heavily reliant on the midmarket. It will be important to head Intel, with its 64-bit Bay Trail platform, off at the pass before it can solidify its own relationship with ZTE, and of course to try to prevent the growing Chinese OEMs from forming unbreakable bonds with their local chip suppliers (Huawei is set to announce a smartphone featuring MediaTek’s eight-core processor next week, for instance).
While the new Snapdragon 805 will be Qualcomm’s flagship for high end devices in the coming months, the 410 will be a powerful proposition for vendors targeting the high growth emerging markets in the holiday season next year (Google has not announced 64-bit support in Android yet). Both products are made with the new 28nm process to reduce cost, power and footprint. The new SoC will not ship until the second half of 2014, so we are likely to see 64-bit creep into Qualcomm’s higher end Snapdragons at Mobile World Congress in February, but announcing the mass market design first makes a powerful statement about the chip giant’s priorities next year, and its determination to dominate the growth areas of the mobile business.
Of course, the 410’s primary target will be China’s 4G roll-outs and there is sure to be a TD-LTE version for China Mobile’s handset suppliers, and all three of the country’s cellcos have now got TD-LTE spectrum and operating licences. Leaping in early with affordable 64-bit could help stimulate uptake of smartphones and high end applications, which in turn would encourage upgrades to higher end devices such as tablets in future, while embedding Qualcomm into the new 4G market. The firm’s senior director for Snapdragon marketing, Leyden Li, commented: “It’s a little bit chicken and the egg. We see this transition happening and we want to be there to help enable the ecosystem.”
The launch comes only two months after Qualcomm’s CMO Anand Chandrasekher said Apple’s 64-bit A7 processor was a ‘marketing gimmick’ of ‘zero benefit’ to users. He argued that the main advantage of the upgrade was to be able to address memory beyond 4Gbytes, not for performance, and that the main requirement for the capability was in server applications. But other Qualcomm leaders clearly disagreed, or at least thought 64-bit would be a powerful ‘marketing gimmick’ for themselves too. And it clearly disrupts the market to manage to squeeze 64-bit, LTE, the Adreno 306 GPUm – plus multimedia features like 13-megapixel camera and 1080p video playback support ‘ into a single package at a suitable price level for a $150 handset. Other mass market chip suppliers will need to think of a response quickly, as high margin Qualcomm takes on the unexpected role of driving prices down, and enabling the new economics of LTE in emerging markets.
The shift in the balance of power towards emerging markets may help calm down the arms race of bits, MHz and cores between mobile chipmakers, since the economics of constantly boosting the specifications will start to fail ‘ especially if the benefits to users are not clearly apparent. It is not just Qualcomm making this argument, perhaps defensively. This week, Broadcom co-founder and chairman Henry Samueli, in a wide-ranging interview with IDG News, called for a halt in the mobile processor speed wars.
He said the increases in clock speeds were outpacing advances in battery life and power management, to the detriment of the user experience. He said: ‘People like a bigger number on the box [though] the experience may not be any different. It’s keeping up with the Joneses. You have to do it, but eventually I think the industry will decide battery life is more important than an extra few hundred megahertz of clock rate.’
He pointed out that, as chip suppliers move to new processes – from 28nm to 16nm to 10nm – power dissipation falls, but ‘unfortunately, people are still running uphill on the speed wars and trying to build faster cores that are running at 2GHz, 2.5GHz, 3GHz. That drives the power back up again. Assuming you can level off and say, well, 2GHz is fast enough, and then you migrate to the next technology, power will actually go down.’
As well as faster clock speeds, the mobile processor and SoC suppliers are also racing to add more cores, and Huawei is reported to be unveiling an Android handset running on the new MediaTek offering next week. The Honor 4 will be presented to the media on December 16 and claims it will sport a ‘true’ octacore CPU, with clock speeds of 1.7GHz. However, Samsung could actually claim to have pipped Huawei with the non-US version of the Galaxy Note 3, which runs its own Exynos 5 processor with eight 1.9GHz cores.
The Honor 4 will come with a 5.5-inch display, but this will be 720p rather than 1080p HD. Apart from its processor, it will have standard specifications for high end Android devices, such as a 13-megapixel camera, 3Gbytes of internal storage and 2Gbytes of RAM.
As MediaTek seeks to take its place alongside Nvidia and Samsung as a leader in multicore mobile processors, Qualcomm will be looking to convince customers that the same performance can be achieved with just four cores, and with better battery life, using its latest Snapdragon, the quad-core 805.