Qualcomm just made another 5G big chip announcement – The Fool Motley

Giant of wireless technology Qualcomm (NASDAQ: QCOM) announced its second-generation 5G cellular modem, known as Snapdragon X55, earlier this month. The modem is a significant advance over the company's first-generation 5G modem, called Snapdragon X50.

While there is a market for standalone cellular modems, the vast majority of smartphones use application processors with leading integrated cellular baseband processors. This integration is popular because it allows smartphone manufacturers to build smaller logic cards and potentially improve energy efficiency.

On February 25, Qualcomm announced a new mobile application processor, without a name, in which the Snapdragon X55 modem will be integrated. Here is why it's a big problem.

5G device proliferation

In simple terms, the integration of a 5G modem by Qualcomm into its next premium mobile application processor should result in a dramatic increase in the number of 5G-enabled smartphones.

For example, if we look Samsungof (NASDAQOTH: SSNLF) Galaxy S10 smartphones recently announced, the three main models in the range – Galaxy S10e, Galaxy S10 and Galaxy S10 + – do not have the capacity 5G at all. Instead, the 5G is limited to an ultra-premium model, the Galaxy S10 5G, which combines the Qualcomm Snapdragon 855 mobile application processor with a Qualcomm X50 5G standalone modem.

Once this new 5G mobile platform has been developed, Qualcomm says its customers will now have access to a sample. They will be integrated into devices in the first half of 2020 – each smartphone using this platform should have 5G functionality. So, I guess all the successors of Galaxy S10 series smartphones will be 5G compatible.

Why is it important

If you are a Qualcomm investor, this should interest you for two reasons. First of all, it seems that Qualcomm is not abandoning mobile processor technology: this new mobile platform with a built-in 5G modem should provide clear leadership in modem technology, thus strengthening the position of the society. commercial supplier of high-end mobile processors.

Beyond that, the proliferation of 5G also benefits Qualcomm: the growth of dollar content of smartphones. I do not see how Qualcomm is considering pricing this future mobile platform, but I would not be surprised if the company was able to take advantage of an increase in its selling price compared to the current flagship processor of the company, Snapdragon 855.

In addition, Qualcomm has invested heavily to strengthen its efforts in RF front-end chips. During the 4G era, many flagship phones were provided by third parties. However, at the age of 5G, Qualcomm seems to gain a lot in traction with such chips.

According to Steve Mollenkopf, General Manager of Qualcomm, about the latest call for results, "almost all devices related to these winning solutions in 5G design use our RF front-end solutions and we hope that these solutions will have a significant positive impact on our interface RF product line. " (In this case, Mollenkopf talks about the design gains of his initial Snapdragon X50 5G modem.)

The idea is simple: as Qualcomm's 5G application processors become more widespread, sales of the company's 5G RF front-end solution are expected to grow significantly. This growth in content is particularly important for Qualcomm as sales of smartphone units across the industry continued to fall.

Take away food

The performance of Qualcomm's technology around the 5G seems extremely solid. The company's basic modem technology appears to be the best in its class and the company is wasting no time in integrating this differentiated 5G modem technology with application processors that should be widely adopted.

Only time will tell if Qualcomm will be able to keep the lead of the 5G that seems to open, but it seems that the first rounds of the 5G transition should be very lenient towards the wireless technology giant .