The Snapdragon is under siege
VR-Zone sat down with John Stefanac, Qualcomm’s man in southeast Asia and the Pacific, to talk about Qualcomm, LTE, and the game of thrones in the mobile sector.
For a better part of the mobile revolution, Qualcomm was the king of the castle because it was the only real player in said castle. Sure, there are a handful of other SoC makers, but none are as encompassing as Qualcomm.
Now the Snapdragon is under siege. On one end Qualcomm is dealing with the likes of MediaTek and MIPS, companies that are trying to get in on the low-to-mid range ends of the market, and on the other hand it’s dealing with the powerhouse of Intel which is stumbling slowly into the mobile space. The other wildcard are various regulatory bodies, which have the power to kill Qualcomm’s LTE dreams.
But Qualcomm is more than just a processor company; it’s involved in all aspects of the mobile business. The fact that it’s so broad — dealing with everything from CPUs, basebands, to video processors, is it’s best defense against being encroached by MediaTek on one side and MIPS on the other.
That could all change in the game of thrones that is the mobile market space. Competitors emerge and competitors die, as do corporate alliances.
How does Qualcomm plan to stay the king of the market? Read on to see what John Stefanac has to say.
VR-Zone: MediaTek and MIPS are both going for the rapidly growing low-end mobile market. How does Qualcomm plan to compete with these companies in this market?
We do a lot of work in that space, with these “emerging accounts”. Our 8225Q quadcore processor has been extremely popular in Southeast Asia markets. In Thailand, Indonesia, the Philippines and Vietnam, 50 percent of the 3G devices being sold in those markets are under $150. We need to provide solutions for that category. That’s why you’ll see a lot of these indigenous brands doing quite well. If you look at market share, they tend to be [on average] the third largest OEM in their respective market because they are catering to that segment. So their market share continues to grow.
We’re helping these brands and emerging OEMs come together with brands and solutions that are specifically aimed at those segments. The other important factor there also is the involvement of operators. We’ve been doing a lot of work with operators. Traditionally, the operators in these markets have been somewhat agnostic of the devices themselves as they don’t subsidize the device or anything like that. But they understand the importance the device actually has in the whole ecosystem, and the relationship that is actually formed between the operator and the subscriber. They’ve been getting more involved in addressing that segment with their own branded devices or creating an association with a local brand that helps in that whole relationship.
VRZ: You mentioned that you’re working hard to establish relationships with operators. Right now Intel is making a push into the mobile sector. Intel is well known for having a very effective B2B marketing machine. How will Qualcomm compete with that?
We already are. Let’s not lose sight of the fact that Qualcomm’s heritage is in the mobile space. We’ve been doing this since 1985. We understand mobile.
It’s a lot easier going from small to large [chips] than it is going from large to small. There’s a whole different set of issues that these guys face. If you look at the sort of products [Intel] has been associated with in the past, it’s large machines with large footprints and large processors.
It’s a very different paradigm to what we’re doing in the space. Couple of things to bear in mind here: the sort of space Qualcomm is in is not limited to the smartphone. Our technology is going in to a whole range of different products — from smartphones to cars. Our solutions are going in to medical devices. Don’t look at Qualcomm at just being involved in the smartphone space.
VRZ: How’s LTE doing in Asia? In many countries around the world, like China, it’s having trouble overcoming the regulatory leviathan.
You need to look at it in a couple of different ways. We’re seeing strong take up of LTE in developed markets, an aspect of that is what the consumer is able to afford. A lot of these developed markets have a longer history with other broadband technologies like 3G. They have a subscriber base that’s more used to using high-speed wireless.
In these other markets, there are a couple of issues. One, there’s still a large user base of 2G. Let’s be clear: the success of 4G/LTE will depend entirely on the success of 3G. No point going to 4G if you don’t have a successful 3G. We’re still doing a lot of work, and the operators are doing a lot of work, in converting that 2G base to 3G. There’s still a long roadmap that’s still being developed for 3G.
The other aspect, of course, is getting access to the right amounts of spectrum. You don’t deploy LTE in small amounts of spectrum — you need 15 to 20 megahertz of spectrum. Trying to find operators that have access to that much spectrum is not easy. A lot of these operators either have small bits of spectrum or large bits of spectrum fragmented in five or 10 megahertz chunks. That’s been one of the aspects of a slowdown of deployment in some markets.
Important point: there’s still a lot of life left in 3G. That’s where the operators are focused right now.
VRZ: Any big success stories for LTE deployment in the region?
Yes. Look at what Korea is doing and look at what Japan is doing. Any of these developed markets that have had broadband wireless for some time have all seen strong take up of LTE.
VRZ: Thanks for your time.