COMPUTEX 2018
On July 20, Qualcomm's $47 billion acquisition of Dutch chipmaker NXP Semiconductors was approved for a deadline of five days. After the Trump administration called for a malicious merger by Broadcom, Qualcomm is still caught in the dilemma of the trade war between the Chinese and US governments.
In April this year, the Chinese government postponed approval of the deal. Previously, the US chipmaker had obtained approval from eight of the world's nine regulators to complete the acquisition. In a statement, Qualcomm said it has NXP extended the agreement to 11:59 pm on July 25, New York time.
On July 19, Qualcomm CEO Steve Mollenkopf said in an interview with US media that Qualcomm is still waiting for Chinese regulators to approve its acquisition of NXP Semiconductors, but if on July 25 If the approval of the Chinese regulatory authorities is not available before the day, the transaction will be abandoned.
If it is not approved by China at that time, Qualcomm will pay NXP a previously agreed $2 billion cancellation fee to end the transaction of more than $44 billion. But if the deal is approved, Qualcomm will consolidate the automotive and IoT sectors. Competitive advantage. And have the opportunity to integrate a larger and complete mobile ecosystem in the 5G era.
New vision
On July 10, China Communications Equipment Corporation ZTE signed an agreement with the US Department of Commerce, which will conditionally cancel the ban on US suppliers and ZTE business transactions for nearly three months.
'This is good news.' Brian Modoff said. As Executive Vice President of Qualcomm Strategy and Corporate M&A, Brian Modoff plays an important role at Qualcomm – the top analyst and institutional investor from Wall Street joined Qualcomm more than three years ago. Responsible for working closely with the company's executive committee to determine the company's strategic direction and long-term vision, and to ensure that it is consistent with the company's strategic planning efforts.
For Qualcomm's strategic vision for the next three decades, Brian Modoff said that in the past three decades, through the development of wireless mobile technology to achieve 'people-to-people connectivity', 'in the next 30 years, Qual-comm's strategy is to move technology Expanding into new areas. 'His predictions have come from years of experience and accumulation in the field of wireless networks and communication systems. 'The era of the Internet of Everything is coming, billions of devices will be connected, including various With all kinds of product forms, 5G will be an important element in realizing the world of all things. 'And the acquisition plan of NXP will help Qualcomm achieve this vision.
Qualcomm expects that by 2035, 5G will bring in $12 trillion in economic growth and create 22 million jobs. The Internet of Things is also expected to open a large, fast-growing new market. By 2020, it is in the car, The marketable service market in the Internet of Things and mobile computing will reach $66 billion.
The mobile communications market in which Qualcomm is located is about $32 billion, but with the rise of the Internet of Everything and the acquisition of NXP, including the Internet of Things, ADAS (Autopilot Assistance System), Au-tonomous (autonomous driving), etc., 430 The market opportunity of 100 million US dollars will emerge, and the Internet of Things will become the second largest market for Qualcomm.
Not only that, there will be $19 billion and $20 billion in market opportunities in the data center and RF front-end areas, respectively. The market that Qualcomm will serve will reach $150 billion, which will bring a major opportunity for Qualcomm's development. The premise is that Qualcomm can continue to provide users with better end-to-end design, which will help them reduce costs and enhance product competitiveness. This is why Qualcomm hopes to bring its own system-on-chip (SoC) strength and technology route to NXP in the car. The reasons for the combination of industry technology and sales channels in the fields of security and Internet of Things.
'Qualcomm is actively promoting 5G to commercialize in 2019, better supporting customers and consumers to achieve a smart connected world. And the acquisition of NXP will speed up this process.' Brian Modoff said.
Whether it is promoting 5G commercialization or realizing the complete layout of the Internet of Things, it means a new round of changes and opportunities. It is also a key point for China's relevant departments to complete the approval of NXP's M&A transactions. The US Department of Commerce’s news of the lifting of the ban on ZTE may mean a turnaround.
In the previous dialogue, Qualcomm President Christiano Amon also said: 'We are optimistic about this and hope to get approval before the deadline. We believe the acquisition is very complementary in business. Because once the acquisition is completed Not only will Qualcomm expand its mobile business to other industries, but it will also bring benefits to the entire industry and Chinese partners.'
At present, the tension between the Sino-US trade war has not eased. However, the cooperation between Chinese industry and Qualcomm is continuing. Cristiano Amon said that with the first version of the global 5G standard - 5G New Air (NR) R15 The completion of the standard, including non-independent networking (NSA) and independent networking (SA) standard freeze, the industry accelerates the progress of 5G standards to a prerequisite for one year.
Based on the '5G pilot plan' announced by Qualcomm and leading Chinese manufacturers in early 2018. Enterprises including Lenovo, OPPO, vivo, Xiaomi, ZTE, and Wingtech will jointly promote 5G commercialization and expand the global market. In the second half of the month, the first batch of 5G data and mobile broadband terminals will be launched. More importantly, smart terminal companies including Chinese mobile phone manufacturers plan to release 5G smartphones from March to April 2019.
In addition, Qualcomm is also cooperating with Datang Mobile to conduct 5G new air interface interoperability testing in the 3.5GHz band. Previously, Qualcomm and Datang established a joint venture company, Shengsheng Technology, has obtained regulatory approval and is currently forming a management team. In the near future, we will develop related semiconductor products for the Chinese market, and expand the cellular technology from the mobile phone industry to other industries, bringing opportunities for Qualcomm and the Chinese Internet of Things market. 'With the arrival of 5G in 2019, we are very confident Our partners are ready for great success in the global marketplace.' Cristiano Amon said.
China is good
On July 4th, Huawei’s founder Ren Zhengfei emphasized in his internal speech entitled “Initiatives, Ten Years of Rejuvenation”, 'To continue to use American components in large quantities, this is the result of human civilization, and the United States needs the market to support its industrial development. We are buyers, as long as we are kind to suppliers, we will become friendly partners.'
He said that the '5G standard is the result of the joint efforts of all mankind. It is driven by dozens of companies, tens of thousands of scientists and engineers all over the world, and efforts for more than a decade. The road ahead is still very long. We only recognize advanced Knowing the strength of others, we know that we respect the creation of others. We will buy 50,000 sets of Qualcomm chips this year. We will never go against each other. We are all creating for mankind.
This may be a positive sign for Penny Baldwin, senior vice president and chief marketing officer of Qualcomm.
Eight months ago, Penny Baldwin just joined Qualcomm. Previously, the marketing manager with more than 35 years of marketing and brand marketing experience served as Intel's vice president and general manager of global brand strategy management, responsible for Intel's global brand strategy. Positioning and reputation development and management.
For the 'positive energy' from Chinese technology leaders, Penny Baldwin has the identity of 'hero heroes'. 'We have found that most people in the world don't understand the role of Qualcomm and the importance of our technology. I don't understand our value. 'She and her global team have been trying hard to try new marketing and communication methods to 'make more enterprise-level audiences understand Qualcomm's entire industry ecology and the industry chain. The value of coming. '
The non-technical background allows Penny Baldwin to look at Qualcomm's business model from another dimension. 'In the past, Qualcomm's brand marketing was 'let go' to partners, but technology-driven companies are not as technologically advanced as they are. Get market demand, especially when it comes to expanding mobile technology to a broader market.'
Recently, Penny Baldwin and her team have adjusted their marketing strategies. 'No longer launch 30-second TV commercials, but instead turn to rich content and tell Qualcomm stories.' And many good stories come from China.
At present, Qualcomm is working hard with many Chinese operators, infrastructure equipment manufacturers, smart phone manufacturers and other partners to accelerate the promotion of 5G in 2019. China's partners are becoming the most dynamic partner of Qualcomm.
In early July, Chinese smartphone makers OPPO and vivo both equipped the Qualcomm Xiaolong 845 mobile platform in their flagship models OPPO Find X and vivo NEX. At the same time, Qualcomm released the Snapdragon 710 mobile platform in China. It is aimed at the needs of China's mobile phone users to upgrade, the artificial intelligence application is added to it, using the functions and features originally only on the top of the Snapdragon 800 series flagship platform, enhance the camera and multimedia experience.
On November 17, 2017, Qualcomm and ZTE successfully achieved the world's first 3GPP-compliant end-to-end 5G new air interface system interoperability. The success of this collaborative demonstration will speed up the 5G business process again. The industry is an important milestone in the global 5G development process. Three Chinese smartphone manufacturers, such as Xiaomi, OPPO and vivo, signed an agreement with Qualcomm to purchase $12 billion worth of parts from Qualcomm in the next few years.
Compared with the time when carriers and equipment manufacturers began to transition to 4G 10 years ago, the biggest difference between 4G and 5G development lies in the emergence of Chinese mobile phone manufacturers capable of serving the whole world. For example, Qualcomm CEO Morenkov "In the history of the industry, for the first time, there has been a powerful, technologically advanced Chinese mobile phone manufacturer capable of serving the entire world."
Empowering industry
Unlike Penny Baldwin, who tells stories, Dr. Fan Mingxi, vice president of engineering at Qualcomm, is part of Qualcomm's 'China Story'.
As one of the few top system engineers and managers in the mobile communications industry, Fan Mingxi's job is to help partners achieve innovative applications and experiences. Like 'bridges', he and his team are responsible for connecting Qualcomm's product divisions and operations. Businesses, equipment manufacturers and terminal manufacturers, solving various problems from R&D to technology to product landing.
In June 2018, domestic smartphone manufacturer vivo announced that it has successfully cooperated with Qualcomm to develop a mobile phone 5G millimeter wave antenna array and integrate it into the real machine, and complete the airborne energy measurement of the whole machine. This is Fan Mingxi and his team. Another successful cooperation with domestic mobile phone companies in the 5G business field.
From the initial time as a systems engineer to the R&D department. To the different projects, accumulated experience across the entire product cycle, from advanced system architecture and algorithm design to prototype enablement, through standardization, technology diffusion, commercial products Developed and validated to commercialize the product. Fan Mingxi often said, 'Those questions that others have not solved can inspire our fighting spirit.' And his experience is the best condition, allowing partners to develop their vision and Qualcomm's technology. Seamlessly connected to the solution. As he said, 'If we don't work closely with the terminal manufacturers and the industry, we can't know their business challenges.' While solving these challenges, it also helps Qualcomm continue to open up new boundaries.
According to Counterpoint Research, seven of the world's top 10 3G/4G smartphone manufacturers in 2017 are Chinese manufacturers. Considering that from 2018 to 2022, the cumulative shipments of smartphones will exceed 8.6 billion, and the scale of mobile terminals will be At the end of May, Qualcomm held the 'Artificial Intelligence Innovation Forum' in China, which is China's important market for realizing AI strategy and vision.
For Chinese smart terminal manufacturers that are entering the forefront of the global mobile communications market, cooperation with Qualcomm means continuous innovation to continue their hard-won lead. The market for 5G and IoT is not just a stop. On the phone chip.
As Brian Modoff, executive vice president of Qualcomm Strategy and Corporate M&A, expects, Qualcomm's strategy is to expand mobile technology to new areas. Currently, Qualcomm invests 20% of its revenue each year in research and development, with cumulative R&D investment exceeding US$51 billion. And business expansion to medical, automotive, Internet of Things, smart home, smart city and other fields,
According to the financial report, in 2017, Qualcomm's IoT business revenue has exceeded 1 billion US dollars, and more than 25 specially designed and mass-market IoT intelligent platforms have been launched. As of now, IoT terminal shipments using Qualcomm technology have been More than 1.5 billion units. The Internet of Things era is coming, billions of devices will be connected, and we have found opportunities for market growth in many areas,' Brian Modoff said, 'China is now on the Internet of Things. The investment in the field is also very large. Qualcomm works with Chinese manufacturers and eco-chain partners to accelerate innovation in the Internet of Things and expand the application of the Internet of Things.
At the same time, despite the uncertainty surrounding NXP's acquisition, Qualcomm itself is ready to provide a complete solution in the automotive Internet space. At CES in 2018, Qualcomm and Ford Motor announced a partnership to develop integrated Qualcomm 骁 LTE Modem's in-vehicle information processing platform accelerates the development of connected cars. Currently, more than 30 mainstream auto manufacturers worldwide have adopted Qualcomm's technology. 'We expect to have a design winning bid of $4 billion.' Brian Modoff said.
According to him, Qualcomm will also cooperate with Chinese automakers in the field of in-vehicle communication systems, in-vehicle entertainment information systems and ADAS, covering hardware, security, sensors and other comprehensive solutions. At the same time, Qualcomm will have the opportunity to The cooperative relationship between mutual trust and trust established by Chinese smartphone manufacturers has extended to more fields, and eventually led to a new round of change. (Shen Jianyuan / Wen)
Interview
Shen Jianyuan: Are you worried about the deadline for the approval of Qualcomm to complete the NXP acquisition?
Cristiano Amon: We hope to be approved by the deadline. We believe the acquisition is very complementary in business. This acquisition has been approved in other countries around the world, and once the acquisition is completed, it will help Qualcomm Expanding the mobile business to other industries will also bring benefits to the entire industry and Chinese partners.
Shen Jianyuan: How does Qualcomm view the challenges that Sino-US trade and China's science and technology industry cooperation may face?
Cristiano Amon: First of all, we are still optimistic, because the wireless communication industry is essentially a global industry, and more and more other industrial companies have joined the wireless communication ecosystem. So I believe that future wireless communication The industry will also be a global cooperative industry.
As I mentioned before, Qualcomm's cooperation with Chinese partners has all the elements of a win-win situation, including our technology licensing model. Qualcomm's Chinese partners recognize and respect Qualcomm's intellectual property and patent licensing model, such a Win-win cooperation has brought interest growth to both China and the United States. The technical cooperation between Qualcomm and Chinese partners has also indirectly contributed to the growth of many other industries.
Qualcomm's cooperation with China's mobile phone industry is a model for successful cooperation between China and the United States. Our cooperation not only shows respect for intellectual property rights, but also the cooperation between China and the United States in high-tech fields. The development of the country is beneficial, and it is a typical win-win cooperation. Therefore, I believe that strong business ties between enterprises will become the leading force for stabilizing relations between the two countries.
Shen Jianyuan: Compared with 3G, 4G, 5G, the ecosystem has become more and more complex and complex. How to deal with Qualcomm in the face of various uncertainties?
Cristiano Amon: In the development of Qualcomm, we have repeatedly expressed such a vision: Qualcomm has achieved a connection between people over the past 30 years, and in the next 30 years, Qualcomm will not only achieve The connection between people, and the realization of the Internet of Everything. At this time node, we hope to extend the technology of the smart phone field to the adjacent industry. In this process, whether it is our chipset business, Or the technology licensing model, have been stable development.
Looking ahead, we are very optimistic about the arrival of 5G. Because in the 3G era, the whole industry participants are mainly operators, infrastructure vendors, OEMs and chip and technology providers like Qualcomm. In the 4G era, with mobile phones As a consumer electronics and portable personal computing terminal, some other industry players have begun to join the entire ecosystem, such as large Internet vendors. When 5G arrives, all industries will join the 5G industry chain, including industrial, medical health, automotive. Industry, etc. I think this is a great opportunity for Qualcomm and our partners to continue to grow and expand their business. Qualcomm's success comes from the success of its partners. When our technology and business model meets more The needs of many people, Qualcomm's future opportunities will be even greater.
Shen Jianyuan: In the 5G era, what is the difference between Qualcomm's technology patent licensing model and the past?
Cristiano Amon: First of all, like every generation of wireless technology standards, Qualcomm has already defined the patent license for the 5G era, and the 5G patent license rate. It is foreseeable that most of the terminals in the 3G era are 3G/ 2G multimode terminal, 4G era 3D terminal is the same as 4G/3G multimode terminal, 5G era terminal will still be multimode terminal. In view of this, Qualcomm's business model will not change. Secondly, Qualcomm is licensed for 4G patent business. The model has reached a clear solution with the National Development and Reform Commission of China, and the model for 5G is consistent with this.
Shen Jianyuan: Compared with the smart phone field where new products are released, what is Qualcomm's plan for entering the product field such as the always-on PC?
Cristiano Amon: Our business in the PC field is still in its infancy. We decided to work with Microsoft to develop this category, because we can't imagine PCs failing to connect to the wireless network in the 5G era. As you said, smartphones The speed and scale of development are redefining the use of PCs. We are just getting started and working with the PC ecosystem. Asus, Lenovo, and HP have all released their always-connected PC products based on Qualcomm technology. Recently we Also in the United States and Amazon to launch this category, very attractive to users. When users buy this product from Amazon, they can enjoy free unlimited traffic data until the end of 2018; from 2019, only monthly Pay $10 for a credit card and continue to enjoy unlimited data traffic.
In Europe, we have also released this category. For example, in Italy, this product will be subsidized by the operator, which means that it costs 59 Euros to buy a PC, and you can get a monthly data flow package by paying only 20 Euros per month. We are releasing in many markets around the world, we believe that the always-on PC category will be successful, because we have redefined the PC user experience. For example, for the always connected PC released by Asus, published by Forbes The review article commented that 'ultra-long battery life brings amazing productivity!'
More specifically, we not only released products, but we also learned how to create features that meet market needs and attract more consumers to buy products. There are many differences between PC users and smartphone users. Traditionally, PC users are buying. PC, and will not consider the network connection service first.
At the same time, when smartphone users purchase products, smartphone sales points or operator sales channels often do not sell PC products. However, at this year's Taipei Computer Show (COMPUTEX 2018), Samsung announced that it will launch based on 骁Dragon Mobile PC platform Windows notebook, there is also an important smartphone manufacturer, is also designing PC products based on the Opteron platform. As more and more mobile phone OEMs start to launch PC-based PC products, the products are on the market. The attention gained will be more and more, and will gradually become popular. We are very optimistic about the future development of this category, because this category will be able to truly change the user experience.