Qualcomm's dominance in the Smartphone Industry
Qualcomm undoubtedly has been the top exporter of Smartphone Processors for years now. They have earned a reputation for being the top Android phone Processor and wireless Modems supplier in the Industry for quite a long time resulting in their profits reaching all time high. But the increasing cost of their 800 series of flagship Processors and the lack of reliable competitors in this space has given Qualcomm the power to control the flow of the whole industry on their own resulting in a chance to establish a complete monopoly. How exactly is it going to affect the end consumers like us as in a good way or a bad way? Do Smartphone manufacturers have any other options other than Qualcomm if things go bad? Let's have a look at it.
Flashback:
Back in the days when Smartphones were starting to be the next big thing in the Industry there was a need for a powerful silicon chipset that can handle all these basic tasks without breaking a sweat. The first Soc in the 800 series by Qualcomm established a benchmark for premium tier of Smartphones and tablets SoC by its blazing fast processing speed, great battery life, amazing GPU performance and a set of multimedia features that wasn't delivered by any of the other chip makers at that time. Soon, all the top tier brands turned to Qualcomm to use their flagship SoC’s because of the stability offered by them in the long term which is a case till now. The closest manufacturer MediaTek at that time had a really bad reputation because of the bad optimizations and thermal throttling of their processors which was the main reason for Smartphone brands shifting from them. After the huge success of their flagship processors Qualcomm launched their budget series of chipsets like the 400 series and 600 series SoC’s for budget and mid range phones respectively which offered unmatched performance at their respective price points. One thing that resulted in Qualcomm taking over the whole chip manufacturing industry was the kind of developer support they had as they made their source code Public which Mediatek never did. Hence, the Qualcomm equipped phones were a go to option for a consumer who just wanted to flash a custom Rom.
Current Trend:
From the last 5 years starting from budget segment to flagships majority of smartphones have a Qualcomm SoC powering it. Talking about flagship smartphones Qualcomm SoC’s enabled devices are by default the only option that are available in the Android segment. That's how much Qualcomm is dominant in the flagship segment. They have proved their reliability over the years and they are first to adapt to new technologies. Qualcomm has a tendency to use the latest and greatest Arm CPU cores that are available in the market with their SoC’s. The Adreno GPUs have always been the secret weapon of Qualcomm against the competitors from the beginning. The acquisition of Amd's mobile division from which the Adreno GPUs were born was the most fruitful decision taken by Qualcomm till now. When most of the competitors like Mediatek, Samsung and Huawei have used the Mali series GPU of Arm, Qualcomm always had the edge over others with their custom Adreno series of GPU as they delivered much better gaming experience on the smartphones. Now, talking about AI and Machine learning, all the current gen processors of Qualcomm use the next gen AI Engine like top end Hexagon series DSP which improves the user experience considerably. AI has improved the Image recognition and image signal processing in the Smartphones running Qualcomm chipsets by a huge margin which has resulted in much better photography experience.
How can we ignore that Qualcomm has introduced many industry first technologies with their Mobile Processors. They were the first to introduce 5G modems last year with their x55 modem. From the last few years they have established a complete monopoly as a supplier of the wireless broadband that is essential for high speed data connection in Smartphones. At one point of time Apple were forced to use their Modems for their silicons even though Qualcomm was charging a lot of licensing fees from them. Now, Intel is the main supplier for wireless tech to Apple but they are generations behind Qualcomm in adapting current tech as it has been proved in many speed tests that Iphones having Qualcomm Modems have faster Internet connection speeds in comparison to Intel ones.
Alternatives:
Mediatek, Samsung with their Exynos and Huawei with their own custom silicon are the only main competitors of Qualcomm but they are far behind in delivering the same performance and stability that Qualcomm has been able to deliver over the years. After the US sanctions on Huawei they are forced to drop their own custom silicons and are now looking for alternatives for their high end smartphones. Going by the current trends Huawei is looking to partner with Qualcomm to power their flagships from next year. This could be a great deal from a business perspective and market flow for both Huawei and Qualcomm as Huawei still comes second in the Global smartphone sales. Until now there has not been any confirmation from both sides and Huawei can also partner with Mediatek for the same so this should be taken as a grain of salt. But if in reality Huwawei turns to Qualcomm for chip supply this is going to result in Qualcomm establishing a complete monopoly in the Android segment with very few competitors to challenge them as all of the companies that sell high end phones will depend on Qualcomm for their chips.
Samsung is nowhere close with their Exynos. Their Snapdragon counterparts are ahead by miles in giving better CPU+GPU performance in comparison to them. Thermal throttling, Downgraded ISP and the bad battery optimisations are the major drawbacks of the Exynos. The current news stating that Samsung is looking to take on Qualcomm by partnering with Amd to improve the GPU performance of the Exynos is worth waiting for but that's gonna come out not before 2022 and till then Qualcomm would have developed an even better portfolio than Samsung.
In the past Mediatek has been caught several times altering their benchmarks of processors to show it more powerful than the Snapdragon counterpart. These cheap tricks are never going to benefit Mediatek in the long run if they want to compete with Qualcomm but they have improved a lot from the last few years. Instead of being in a number game they are slowly coming back in competition. We are seeing a lot of budget phones running Mediatek processors and they are able to deliver comparable performance to their Snapdragon counterparts. With the Flagship Dimensity 1000 series they are providing flagship level performance at much lower prices compared to Qualcomm’s SDM 865 Processor. For now, brands have lukewarm responses to the Dimensity series chipsets from the time it was launched and even chinese vendors are hesitating to launch a Phone Globally running on a Dimensity 100+ Processor. This condition is just because of the unreliability of Mediatek in Past but let’s hope this will change and brands will show more interest in their flagship Processors. But the main question is Can Mediatek be the next Amd of the smartphone segment? Only time will tell. For now, it seems like only Mediatek has the potential to give a tough fight to Qualcomm in the long run.
According to several reports coming in Xiaomi and Oppo are working on to develop their own in house Processors for their Phones. It is going to take time but we have to see how these two tech giants of China are going to challenge the supremacy of Qualcomm. Next up, Google is also said to be working on their own silicons and maybe they are going to introduce it with their Pixel 6 lineup next year.
Cheap tricks by Qualcomm:
Even now if you don’t consider Qualcomm
doing a monopoly in this industry let me present a few
straight facts :
Phone manufacturers have to pay high patent royalties if they want to purchase baseband chips from them. In Qualcomm words it means ‘No fee = No chips’ resulting in no partnership. They have been dragged by FTC in court for allegations like not doing fair business and making the phones more expensive for consumers.
One more current dirty trend that Qualcomm has done this year is that with the current gen Flagship 865 processor manufacturers can’t choose their own configuration while purchasing the stock from them. The Qualcomm snapdragon 865 processors comes pre-bundled with a x55 5G modem and manufacturers can’t choose whether they want to enable 5G services with their phones or not.
Phone manufacturers have to pay a hefty fine if they fail to purchase the stock of the chipset that they ordered from Qualcomm making it difficult for the Smartphone brands to survive if their product didn’t meet the expected demand.
Qualcomm was accused in the past for offering Apple to pay less patent royalties if they use their Snapdragon series Processor in the Iphones that would have resulted in kicking Intel out of the whole competition.
Over the years Qualcomm has refused to provide essential patents to other chip makers so that no one can challenge their dominance in the industry.
The long battle of Apple vs Qualcomm has been here for years now and both of the companies have sued each other for billions of Dollars in several countries. Majority in which Apple faced a setback in form of paying huge fines for providing the exclusive patents of Qualcomm to Intel secretly.
Increasing Prices:
As per insiders the Latest Qualcomm 865 complete bundle costs Phone Manufacturers anywhere around 150$-160$. Some early reports are coming in for the next year Flagship processor the Snapdragon 875 is going to be 50% costlier than the current generation. This is going to be a big jump in the amount charged by Qualcomm to Phone manufacturers. It's no wonder why we are seeing 1000$ + flagships being sold so often this year. Even Oneplus Phones that used to be a lot more cheaper have now moved to the 1000$ price bracket in the US. Few companies like Google and LG have dropped the SDM 865 Processor from their flagships this year in favor of the Mid range processor like SDM 765G from Qualcomm for cost cutting measures. This is going to be followed by a lot more companies in near future if Qualcomm kept increasing the prices of their flagship processors year by year. One more thing is that the flagship chipset pricing used to be depreciated in the past more often after the first few months of launch but now even after one full year the last gen flagship chip from Qualcomm has depreciated a lot less than expected by industry experts. This has gradually killed the concept of flagship killer phones that used to be a thing until last year in a price sensitive market like India.
It is not a case like Oems can't use their own silicons with the Qualcomm’s wireless broadbands powering it. Just because of the heavy licensing and patent fees charged by Qualcomm forces the vendors to use their offerings instead of any other chipset. One more thing is that optimizing the processor for good battery life with Qualcomm’s wireless tech is a very difficult task to do. So for now at least Qualcomm has these companies by short hairs
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