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With global smartphone sales flagging, Qualcomm charts course for new tech waters

Although the growth of the smartphone market is cooling, Qualcomm is placing their confidence in the adjacent markets of AR, VR, drones, and the IoT.

Published onMay 16, 2016

The chipmaker Qualcomm has built a reputation for themselves in the smartphone industry, but an interview with the leader of their long-term research and development team reveals that the company has no interest in resting on their laurels. The Information sat down with Qualcomm’s Matt Grob, a veteran of the industry who has been with company for the last twenty-five years. Grob spoke passionately about their plans for the future regarding augmented reality, virtual reality, 5G, and drones.

We find innovation to keep the train rolling.

To put Grob’s comments in the appropriate context, it’s important to highlight that the smartphone market is experiencing a global cooldown. It’s estimated that growth in the industry will fail to exceed 10 percent annual growth for the next four years in a row, and Qualcomm has been feeling the pain. In January, the chipmaker reported a 24 percent drop in profits from the previous quarter, and they recently laid off 15 percent of their employees. The company must innovate so as to adapt to the long-scale evolution of networks and the Internet of Things that will see us eventually leaving our smartphones behind in favor of new technologies.

Matt Grob, Executive Vice President and Chief Technology Officer (CTO) of Qualcomm, delivers a speech during the 2014 Global Mobile Internet Conference (GMIC 2015) in Beijing, China, 28 April 2015. The annual Global Mobile Internet Conference (GMIC) opened in Beijing on Tuesday (28 April 2015) with over 30,000 attendees ranging from CEOs to developers to investors. This year, the two-day conference focuses on wearable devices, mobile internet financing, smart cars, mobile entertainment content and intelligent robots.
Matt Grob, Executive Vice President and Chief Technology Officer (CTO) of Qualcomm.

Grob is unfazed by such realities. It’s his intent to ensure that Qualcomm remains at the forefront of nascent fields, supplying components for whatever products ultimately dominate the industry. He believes that 5G, which should be arriving by 2020, will interconnect our world in an unprecedented way. Automobiles will be connected with the web and each other. Drones will be commercially mainstream for security and package delivery (if Qualcomm has their way and if advocates successfully negotiate the playing field with the Federal Aviation Administration). Grob believes that a demand for smartphone components will eventually rise, as many of the same components – like low power media, position location, sensors, and gyroscopes – will remain relevant.

These were the best Qualcomm Snapdragon 820 phones ever released

It is Google’s perspective that augmented reality is the future, a state of play that would see many leaving their smartphones behind entirely. Grob agrees, but he compares our contemporary AR tech with the Apple Newton, underscoring that we are seeing this technology in its absolute infancy. In his belief, it will take ten or more years for the field to develop to the point where it could feasibly replace our handsets.

Promo image for Magic Leap, an ambitious AR project

When the Information points out that the smartphone market is showing signs of stagnation, Grob is quick to point out that “stagnation” is too strong of a term. Furthermore, he asserts that it hardly matters, as emerging markets like AR, VR, and the IoT are “adjacent” to smartphones, by which Qualcomm means that they require similar components. The company projects that these emerging markets combined would represent a $29 billion market by 2020, comparable to the $33 billion market for smartphones and tablets. Grob insists that drones and the Internet of Things are already a multibillion dollar business for Qualcomm, and that the company is aggressively pursuing new avenues including things like health care while constantly developing smaller, faster chips.

We’re still in an era where we’re getting significant performance gains. How many more generations will that continue? It’s hard to say with absolute precision. We find innovation to keep the train rolling.

What are your thoughts regarding Qualcomm’s future and what the technological landscape will look like in the years to come? Is Grob’s perspective an accurate one? Let us know your take in the comments below!

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