Expecting Q1 boost on 5G licensing deal with Apple
In a Q4 earnings presentation this week, Qualcomm CEO Steve Mollenkopf said the company has more than 230 5G “design wins launched or in development,” which is up from 150 in the third quarter. And, of those design wins, “Virtually all…are using our RF front-end solutions for 5G sub-6 and/or millimeter wave.”
This week the San Diego-based R&D powerhouse reported revenues of $4.8 billion, a 17% decline from the same quarter last year, but above the mid-point of prior guidance. And, as 5G continues to scale and more 5G-enabled smartphones hitting the market in 2020, Mollenkopf said licensing revenue is getting back to a seasonal pattern “with fiscal Q1 as a high based on our recent licensing agreement with Apple.”
Mollenkopf, in keeping with messaging from the company, looked ahead to refinements coming to the 5G NR standard in Release 16 and 17 that will enhance the ability of cellular to serve high-value verticals in need of ultra reliable low latency communications and massive support for the internet of things in addition to enhanced mobile broadband.
“We are actively focused on helping to define and standardize Releases 16 and 17 features to support the expansion of 5G into new large adjacent markets, such as enterprise, industrial IoT, and automotive,” the CEO said. “The complexity and expansion of cellular technologies beyond the smartphone into nearly every industry play directly to Qualcomm’s strengths and are why we believe 5G will represent the single biggest opportunity in Qualcomm’s history. ”
In previously published research from Qualcomm and IHS Markit, 5G enablement was pegged at generating $12.3 trillion in “sales enablement.” Given the accelerated standardization timeline and subsequent commercial rollouts, that numbers has been amended up to $13.2 trillion in sales enablement by 2035.
In response to a question, Qualcomm President Cristiano Amon called out “early investment in millimeter wave” as giving the company “a significant technology advantage.” Right now AT&T, Verizon and T-Mobile US are all providing millimeter wave-based 5G services and compatible phones. Amon said activation of millimeter wave bands in Korea, Japan and other markets will further boost the company.
He predicted: “I would probably say that every single launch of a flagship OEM today with the exception of Huawei, they use their own silicon, every other launch of every other OEM has been a Qualcomm Snapdragon platform, and that positioned us very well to partner with OEMs for 5G ramp, including Samsung.”