Qualcomm, up close and personal: How the new king of mobile will keep Intel at bay

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At Mobile World Congress, there were few companies with a swagger in their step. The rapid growth of the mobile market over the last few years has created just a handful of winners, and a lot of losers. Intel, after one too many failures in the smartphone arena, seemed almost bashful about its mobile efforts this year. Nokia, no longer the massive power house of mobile tech that it once was, hid behind a cutesy Finnish facade that was no doubt designed to discourage body blows from journalists. Microsoft, despite re-branding an entire hotel with 10-storey Windows decals, had almost nothing to say, asking us yet again to hold on for a bit longer. And then there was Qualcomm. As I watched the Qualcomm execs strut around, their chests puffed out, fresh from uncountable victories over the last few years, I wondered if they had actually stopped to scoop up the bloody dribbles of confidence left by Intel and the fellow vanquished upon the canvas floor of the mobile boxing ring. For a moment, I considered if there was a Second Law of Confidence — that confidence can’t be created or destroyed, only transferred from loser to victor.
Qualcomm has had a few very good years. This is a company that, 10 years ago, was basically just an R&D company that specialized in developing mobile IP (intellectual property). Today, just 30% of Qualcomm’s revenues derive from IP licenses (chip designs, patents) — in particular, Qualcomm owns most of the patents behind the UMTS air interface present on almost every modern smartphone. The rest of the company’s (rapidly growing) revenues stem from what it calls its chipset business (QCT) — the SoCs and modems that power a large percentage of the world’s mobile phones, but also other parts of the mobile telephony stack as well, such as base stations and femtocells.
Qualcomm’s quick growth in these markets has been almost entirely down to two factors: Being first to market with key products (the first 28nm LTE modem), and highly integrated, high-performance SoCs that are easy for OEMs to deploy. These two factors then led to an even more important third: Incumbency. Because Qualcomm is already in so many shipping devices, and because it’s much easier to stick with a platform that your engineers already have experience with rather than move to a new one, OEMs will stick with Qualcomm until something far greater comes along. It is not enough for Intel to offer an Atom chip that merely breaks even with Snapdragon — it must blow Qualcomm completely out of the water.

Yours truly, gazing wistfully into a 22nm Intel Bay Trail wafer.

Over the last couple of weeks, I’ve spoken to executives from both Qualcomm and Intel about their future efforts in mobile. Both companies, as you’d expect given their almost diametrically opposed backgrounds, are taking very different approaches. Intel is continuing its efforts to develop competitive wireless, graphics, and other important IP blocks for mobile applications, but ultimately it’s still relying on its process advantage — specifically 14nm later this year — to deliver the product wins. Qualcomm, on the other hand, is hammering home its advantage in home-grown, highly integrated and efficient IP blocks to create mobile platforms that are more eloquent.

The difficulty of building a truly great chip

At MWC in Barcelona, I sat across from Raj Talluri, Qualcomm’s senior vice president of product management. When it comes to laying out Qualcomm’s future SoC roadmap, the buck stops at Talluri — but as it turns out, his background is actually in computer vision and psychovisual work, and so our conversation actually began with me questioning him about 4K.
Are we actually ready to move to 4K? (Read: What is 4K?) Isn’t it just a case of trying to market the Next Great Thing to hapless consumers? I point out that there’s almost no 4K footage out there, no 4K broadcast standard, and no 4K optical disc format. Isn’t 1080p enough? Doesn’t resolution cease to matter once you reach the PPI of Apple’s mystical Retina display?

Qualcomm’s color e-ink Mirasol display technology, in the Toq smartwatch. One of Qualcomm’s more interesting technologies that doesn’t yet get a lot of press.

“I think the actual limit… is the limit of human perception of reality. For example, when I look at you now, the resolution at the point where I’m foveating [the high-resolution center of the retina] is much higher than 4K,” says Talluri. “It’s actually 10 times more than 8K. So, anything you see approaching that resolution, you will want it.” I am reminded of when our writer David Cardinal attended CES 2012 and saw one of the first 8K TVs. “If anyone tells you there is no point in 8K displays know this: they haven’t seen this one.” Back to Talluri: “I look at you and I see how I see you… then I look at a video, and it looks better than before, but still nowhere near the limits of human perception.”
Eventually, I steer the conversation back to the topic of SoCs: But what about power consumption?
“That’s the challenge,” Talluri says. “With this one,” he waves around a Sony Xperia Z2 with a Snapdragon 801 SoC inside, “we’ve really nailed it. Our power consumption figures are so good that you can record 4K with the same power consumption that you used to record 1080p.” I ask if that’s purely down to a dedicated 4K hardware block on the SoC, but Talluri says it’s much more complex than that. “We do a lot of things that people don’t quite think about.” He talks about how shooting a video involves encoding, camera stabilization, auto focus, processing (white balance), audio synchronization, and writing huge amounts of data — while being able to pause it all if you receive a phone call. “Dedicated hardware is one aspect of it, but it’s more about system engineering.”
And so we finally get to the crux of why Qualcomm has such a competitive advantage over other mobile chip makers. Talking to Talluri, I start to appreciate that building a high-performance, power-efficient SoC is only partially about the specific hardware blocks. Much more important is how those blocks are connected, and — this is the key — how those blocks are actually used.