Qualcomm

Qualcomm Q1 ends at ‘inflection point’ as it gains from 5G ramp

5G projects begin to pay off for chip firm as it reveals strong start to the fiscal year in terms of revenue

As it reported what it called a strong fiscal first quarter, leading chip manufacturer Qualcomm believes it has entered a new phase in which the 5G arena will be the engine for future growth.

For the three-month period ended 29 December 2019, even as the company saw overall revenues rise 5% annually to $5.077bn, net income slipped 13% on an annual basis to $925m. Looking between the lines, Qualcomm revealed that in Q1 2020, it had seen a marked (42%) year-on-year rise in licensing revenues, totalling $1.543bn, while research and development investment for the quarter was up by 11% compared with Q1 2019 to $1.406bn.

Commenting on the Q1 results, Steve Mollenkopf, CEO of Qualcomm Incorporated, said: “Our strong fiscal first-quarter financial performance reflects a significant inflection point for Qualcomm as we begin to realise the benefits from the ramp-up of 5G.”

Indeed, during the quarter, the company announced a number of announcements, in particular in the 5G arena. With device maker ZTE, Qualcomm Technologies revealed a successful 5G-enabled voice over new radio (VoNR) call, something the firms said would be fundamental for mobile operators going forward.

They regarded VoNR calls an important step in the global mobile industry’s evolution from non-standalone to standalone, as it will enable operators to deliver high-quality voice services without having to rely on VoLTE (voice over LTE) or an LTE anchor.

Qualcomm also launched what it claims is the world’s first 5G-supported extended reality (XR) platform – the Snapdragon XR2 – in December 2019, which it says ushers in a new era of augmented, virtual and mixed-reality experiences that are more immersive, intelligent and connected.

It also used the CES consumer electronics show in January 2020 as a platform for its advances in in-vehicle systems.

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Notably, it launched a new platform, Qualcomm Snapdragon Ride, to accelerate autonomous driving, and has entered into a partnership with Sasken Technologies to extend engineering and customisation support for its automotive customer base.

Snapdragon Ride is designed to pave the way to in-vehicle autonomy with a scalable, customisable and power-efficient autonomous driving platform. It aims to address the complexity of autonomous driving and advanced driver-assistance systems using hardware, artificial intelligence AI and an autonomous driving stack.

In November 2019, attacking a market that could be potentially be hugely lucrative, Qualcomm and Bosch Rexroth revealed the fruits of their work to make 5G-enabled industrial manufacturing a reality by successfully demonstrating industrial devices utilising time-sensitive networking technology while operating over a live 5G network.

The firms said they were targeting a 5G industry segment that could generate $4.7tn in related sales enablement by 2035 – as much as 36% of the $13.2tn opportunity of 5G.

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