Samsung unveils its first 5G integrated chipset for smartphones

Samsung Electronics introduced Exynos 980, its first 5G integrated mobile chipset for the mainstream market. Mass production will start by the end of the year.

Samsung’s 5G devices have so far been using separate modem and APE solutions, including its own Exynos 9820 and Qualcomm’s Snapdragon 855 chipsets teamed up with the Exynos 5100 and Snapdragon X50 modems. The new 5G integrated chipset announced today is Samsung’s first. With an 8nm footprint, the chipset combines the 5G modem and APE processors using 8nm FinFET process.

“With the introduction of our 5G modem last year, Samsung has been driving in the 5G revolution and paved the way towards the next step in mobility,” said Ben Hur, VP of System LSI marketing at Samsung Electronics. “With the 5G-integrated Exynos 980, Samsung is pushing to make 5G more accessible to a wider range of users and continues to lead innovation in the mobile 5G market.”

The chipset’s key specifications include:

  • Modem: supports 5G NR Sub-6GHz with max 2.55Gbps downlink and 1.28Gbps uplink speeds. It is also backward compatible with LTE, 3G, and 2G.
  • CPU: one 2.2GHz Dual-core based on Cortex-A77, and one set of 1.8GHz Hexa-core based on Cortex-A55. It may be worth noting that Samsung’s high-end Exynos 9820 can go up to a max speed of 2.73 GHz.
  • Camera support: single-camera up to 108Mp, or dual-camera 20MP+20MP. Samsung also stresses the integrated AI capability to support photo taking.
  • Video support: 4K UHD 120fps encoding and decoding with HEVC(H.265), H.264, VP9

Samsung said in the announcement that the mass production of Exynos 980 is expected to start by the end of this year, indicating Samsung 5G smartphones and tablets based on this new chipset will hit the market in the first half of 2020, if not the first quarter.

One day earlier, Samsung announced Galaxy A90 5G, a mid-range 5G smartphone, based on Qualcomm’s Snapdragon 855 platform, which is aimed at taking 5G to the mainstream users. The new Exynos 980 is likely to power the next generation of mid-range devices.

The 5G momentum in South Korea, Samsung’s home market, has been going strong. After registering 1 million subscribers by the beginning of June, government data showed that by the end of July the total number of 5G subscribers, from all three operators combined, already topped 2 million.

Here is Exynos 980’s promotion video:

 

Qualcomm makes its Wi-Fi 6 move

Mobile chip giant Qualcomm wants a bigger piece of the wifi action and reckons the advent of the next generation of technology is a good opportunity to grab it.

At a recent event in San Francisco devoted entirely to Wi-Fi 6, Qualcomm launched a family of Wi-Fi 6 platforms branded the Networking Pro Series. There are four platforms, to be precise, named 1200, 800, 600, and 400, that are distinguished as follows:

qualcomm wifi 6 products

Qualcomm has been banging on about Wi-Fi 6 (or 802.11ax as it was known before the Wi-Fi Alliance belatedly saw sense on nomenclature), for years, so this move is no great surprise. The big improvement isn’t so much about data rates but the number of devices a given router can support – i.e. capacity, as well as a bunch of other less obvious enhancements.

“Wi-Fi 6 is a transformational reimagining of how Wi-Fi works, a leap forward arriving alongside 5G and designed to accommodate the massive surge of connected devices,” said Nick Kucharewski, GM of wireless infrastructure and networking at Qualcomm. “The Qualcomm Networking Pro Series platforms raise the bar for the management of the ever-growing number of connected devices, the variation and complexity of those devices’ data needs, and the quality of the overall connectivity experiences they deliver.”

“The transformative nature of Wi-Fi 6 will have a deep impact across all categories of connected devices and environments,” said Edgar Figueroa, CEO of the Wi-Fi Alliance. “We’re going to witness dynamic changes in Wi-Fi with the inclusion of advanced features in Wi-Fi 6 which will drive improved network capacity, better performance and increased speeds.”

As well as potentially helping it grab wifi router market share from the likes of Broadcom and Cisco, Qualcomm reckons its focus on Wi-Fi 6 can help it in other markets such as connected car and IoT. It could also do a lot to proliferate the mesh technology that Qualcomm has also been very keen to promote.

Downbeat outlook fuelled by Huawei situation hits Qualcomm shares

Mobile chip giant Qualcomm delivered solid Q2 numbers but a gloomy outlook thanks largely to the Huawei export ban drove down its share price.

Qualcomm’s core numbers were broadly in line with expectations, with revenues a bit below but earnings per share above. But in the ensuing earnings call Qualcomm CEO Steve Mollenkopf warned of a few factors that are likely to negatively affect the company in the coming quarters.

“The Huawei export ban, along with the pivot from 4G to 5G which accelerated over the past couple of months, has contributed to industry conditions particularly in China that we expect will create headwinds in our next two fiscal quarters,” said Mollenkopf. “As a result of the export ban, Huawei shifted their emphasis to building market share in the domestic China market, where we do not see the corresponding benefit in product or licensing revenue.

“In addition, our customers in the China market are working through their existing 4G inventory and deemphasizing their second half 2019 4G launches, as they shift their priorities to their 5G launches in early 2020. As a result, we do not expect the typical seasonal benefits given this unique market dynamics. For the first calendar quarter of 2020, we anticipate reaching the inflection point as our financial results begin to reflect the benefits of our substantial efforts over the years to bring 5G to the market worldwide.”

The reason Huawei’s increased emphasis on China is to Qualcomm’s detriment is two-fold. Huawei presumably uses its own chips in devices it sells within China, so Qualcomm doesn’t have a piece of that action. It does, however, sell components to the other Chinese smartphone makers, so any increase in competitive pressure from Huawei will affect Qualcomm’s revenues from sales to them.

Compounding this is a general softness observed in the Chinese market, which Qualcomm seems to mainly attribute to a lull before the 5G storm. It looks like the channel is trying to reduce the amount of 3G/4G inventory ahead in anticipated demand for 5G devices. As a result Qualcomm has reduced its expectations for global connected device shipments this year by around 100 million.

In the longer term Qualcomm still feels pretty bullish, largely on the back of its claimed 5G modem leadership. Qualcomm reckons the Huawei 5G modem is at least 50% bigger than its one and, of course, Intel’s efforts turned out to be a complete bust. It’s hard to argue with this conclusion so, while Qualcomm’s shares were down 6% in pre-market trading at time of writing, its long term modem prospects still look pretty healthy.

Qualcomm shipment outlook

Qualcomm Earnings Infographic Q32019

Europe takes another chunk out of Qualcomm profits

The European Commission has announced it will once again fine Qualcomm for market abuse, with the investigation this time focusing on 3G baseband chipsets.

It seems time does not heal all wounds as this investigation focused on market abuse between 2009 and 2011, and a concept known as ‘predatory pricing’. In short, Qualcomm used its dominant market position to sell products to strategically important customers, below cost price, to effectively kill off any competition before it had a chance to gain momentum.

“Baseband chipsets are key components so mobile devices can connect to the Internet,” said Margrethe Vestager, the Commissioner in charge of competition policy. “Qualcomm sold these products at a price below cost to key customers with the intention of eliminating a competitor.

“Qualcomm’s strategic behaviour prevented competition and innovation in this market and limited the choice available to consumers in a sector with a huge demand and potential for innovative technologies. Since this is illegal under EU antitrust rules, we have today fined Qualcomm €242 million.”

Although the European Commission affords the opportunity for companies to use market advantages to seek profits, but when it becomes anti-competitive the bureaucrats draw a line. This is what has happened in this instance.

At the time, Qualcomm controlled roughly 60% market share of the UMTS baseband chipset segment, three times as great as the nearest competitor, though this position was used to kill competition before it had a chance to emerge. Using its relationships with Huawei and ZTE, Qualcomm sold products at low enough prices no-one could compete.

This is the challenge with segments which have such high-barriers to entry, key customer accounts are critically important, such are the investments which need to be made in R&D. Qualcomm effectively created a loss leader of these products to stem the critical flow of funds into any competition which could develop from the smallest glimmer of hope. In this case, the firm in question was Icera, which was eventually acquired by Nvidia.

The fine in this case represents 1.27% of Qualcomm’s turnover in 2018 and will hopefully deter companies from engaging in anticompetitive activity in the future.

For Vestager, this is another parting shot as she wraps up her tenure in the competition policy office, a position she has held since 2014.

The Commissioner has built a reputation of taking on big tech who make a habit of practising in anti-competitive activities. Qualcomm has been a frequent combatant of Vestager, though she has got plenty of experience dealing with the likes of Google and Amazon also, the latter of which is the subject of the latest probe.

Assuming the tech giants will be happy to see the back of her would be very reasonable, though it remains to be seen who will replace the feisty and combative Vestager.

Qualcomm makes its flagship chip a bit better

Just when you thought the Snapdragon 855 was as good as it gets, Qualcomm has only gone and put a plus on the end of it.

As its name implies, the Snapdragon 855 Plus is a bit better than the Snapdragon 855 chip, which Qualcomm launched amid much fanfare in Hawaii late last year. The marketing top-line for this launch is that it’s all about mobile gaming, with both the CPU and GPU being a bit faster than in the boring old vanilla 855. As with its predecessor the 855 Plus also plays nice with the 5G X50 modem.

“Snapdragon 855 Plus will raise the bar for elite gamers with the increase in CPU and GPU performance and elevate experiences for 5G, gaming, AI and XR, which is something our OEM customers look to us to deliver,” said Kedar Kondap, VP of product management at Qualcomm. “Snapdragon 855 Plus is our most advanced mobile platform to date and will build upon the success of the 2019 Android flagship Snapdragon 855 5G mobile platform.”

Apart from the faster processors there is talk of something called the Snapdragon Elite Gaming Experience, which includes the Vulkan 1.1 Graphics Driver, which Qualcomm compares favourably to Open GL ES and the ‘Game Jank Reducer’, a must-have for anyone whose game jank has reached troublesome levels. As if that’s not enough this SoC features the fourth generation of Qualcomm’s AI engine and some VR/AR features.

Ericsson, T-Mobile and Qualcomm claim 600 MHz 5G first

A trio of telecoms trailblazers has claimed the world’s first low-band 5G data session on a commercial 5G modem.

T-Mobile US, Ericsson and Qualcomm were the operator, networking vendor and modem vendors involved, with T-Mobile chosen because the 600 MHz band forms a big part of its 5G plans. The demo was conducted at T-Mobile’s lab in Bellevue, Washington, using Ericsson’s Radio System and Qualcomm’s Snapdragon X55 modem.

“This modem will power devices that tap into the 600 MHz low-band spectrum we’ll use to blanket the country with 5G.” said TMUS CTO Neville Ray. “And we’re not stopping there. If regulators approve our merger with Sprint, we’ll have the crucial mid-band spectrum and resources needed to supercharge our network and deliver broad AND deep, transformational 5G across the U.S.”

“Today’s data call marks a significant milestone in 5G’s ongoing rollout across the United States, paving the way for the launch of commercial networks and devices on low-band FDD spectrum,” said Cristiano Amon, Qualcomm President. “This call demonstrates the ability to dramatically increase 5G’s global footprint and we look forward to continuing our work with industry leaders like Ericsson and T-Mobile to unlock the full potential of 5G for consumers and new industries around the world.”

“Ericsson and Qualcomm Technologies have successfully tested and commercialized 5G globally across different spectrum bands, and together with T-Mobile we have now reached another major milestone as we are enabling 5G on low bands,” said Fredrik Jejdling, Head of Networks at Ericsson. “This shows that our industry is now ready for building wider 5G coverage that will enhance end user experience.”

That’s about it really, but it’s a Friday in the middle of Summer so news is thin on the ground, alright? As you can see from the canned quotes, ‘firsts’ like these largely exist to give the parties involved a bit of publicity and make them look ahead of the game. Someone had to do 5G over 600 MHz first, we guess, so well done chaps.

Apple said to be sniffing around Intel’s modem business

Having recently ditched Intel’s modem business like a bad habit, gadget giant Apple is reportedly now thinking of buying it.

The rumour comes courtesy of The Information, which says it got the scoop from no less than four unnamed people who we’re told have been briefed on the discussions between Apple and Intel. Specifically Apple is said to be interested in Intel’s German modem operations, which is where much of the 5G R7D will have taken place.

Intel found itself as an unwitting pawn in Apple’s legal battle of will with mobile chip giant Qualcomm. Apple wasn’t happy with what Qualcomm was charging for its modems and took to the courts to do something about it. This was always just a form of negotiation, a crucial part of which was Apple’s insistence that it could just walk away from Qualcomm if it didn’t lower its prices.

The problem with this is that there are very few 5G modem players in town and even fewer that aren’t affiliated to a smartphone competitor of Apple’s. One of those was supposed to Intel, which found itself constantly defending its ability to deliver a competitive 5G modem in the face of understandable scepticism from the industry and, increasingly, from Apple itself.

Eventually the Emperor was revealed to be naked and Apple was forced to settle with Qualcomm once it became clear Intel wasn’t able to deliver. Intel wasted little time in throwing in the towel entirely on 5G modems once their only customer had ditched them and promptly retreated into the shadows, vaguely muttering about IoT.

But that doesn’t mean its efforts to deliver a 5G modem were entirely wasted. Through acquisition and organic R&D Intel must have picked up a thing or two about delivering 5G radio over the years. While Apple is forced in the mid term to rely on the loathed Qualcomm, it ultimately aspires to modem self-reliance. Since Intel’s 5G unit is presumably available at a knock-down price following its public humiliation it wouldn’t be at all surprising to see Apple snap it up, if only for a laugh.

Qualcomm’s share price nosedives after FTC antirust loss

Qualcomm might have some of the most battle-hardened legal experts in the technology world, but it can’t win every fight.

In a ruling coming out of the District Court for the Northern District of California, Judge Lucy Koh has ruled the chipset giant had violated the Federal Trade Commission Act. The judgment could have a significant impact on the Qualcomm business model, with Judge Koh suggesting it used its dominant position to impose excessive licensing fees.

While this certainly won’t be the end of Qualcomm dominance in the chipset market, the firm houses too much competence and smarts, it might have a drastic impact on the spreadsheets. And investors seem to be fearing the worst also, with Qualcomm’s share price declining almost 12% in pre-market trading at the time of writing.

“Qualcomm’s licensing practices have strangled competition in the CDMA and the premium LTE modem chip markets for years, and harmed rivals, OEMs, and end consumers in the process,” Judge Koh said in the ruling.

In a filing made in 2017, the Federal Trade Commission argued Qualcomm was employing anticompetitive tactics, using its dominant position in certain segments of the semiconductor market to hamper competition and effectively hold customers to random. The FTC suggested some components licenced by Qualcomm were standard essential parts, meaning they would have to be licenced on ‘fair, reasonable and non-discriminatory terms’. In short, Qualcomm should not have been charging such a handsome premium on the licences.

The FTC also claimed it was not reasonable for Qualcomm to enter into an exclusive agreement for some components with Apple, shutting other smartphone manufacturers out of the equation.

The Qualcomm business model has been under fire for some time, with the business facing numerous legal challenges in different markets worldwide. Although this is only a single ruling, it remains to be seen whether this sets a precedent and a subsequent domino effect around the world. Qualcomm is on the ropes here, though it will be interesting to see how the firm reacts to this latest antitrust blow.

US supply ban threatens to cripple Huawei’s global business

Another day, another escalation as Google heads a stampede of US companies apparently refusing to do business with Huawei.

As escalations go, however, this is a pretty big one. Reuters was the first report that Google has suspended some business with Huawei in response to the company being put on the US ‘entity list’, which means US companies need explicit permission from the US state before they’re allowed to sell anything to them. It seems that permission has been denied.

For Google this means denying access to those bits of Android Google licenses – mainly the Play Store and Google’s own mobile products such as the Gmail and Maps apps. Huawei can still access the core Android operating system as that has an open source license but, as companies such as Amazon have discovered, that’s pretty useless without all the other Google goodies.

We recently wrote that Huawei’s addition to the entity list is the most significant consequence of Trump’s executive order and here we have an immediate illustration of that. It looks like pretty much all other US companies are also rushing to comply with the new regulations, with Bloomberg reporting that Qualcomm and Intel are among others cutting of business with Huawei and others will presumably follow. Nikkei even reckons German chip-maker Infineon has joined the stampede.

Huawei already has an extensive chip-making operation of its own, so arguably it can cope without the likes of Qualcomm, but what about the millions of other bits and bobs that get crammed into a smartphone such as screens, cameras, memory, sensors, etc? A lot of these could be supplied by non-US companies like Samsung and, of course, Chinese ones, but there must surely be some areas in which Huawei is entirely reliant on the US supply chain.

But Google’s licensed mobile products and services are unique. An Android phone that doesn’t provide access to the Play store is massively diminished in its utility to the end user and Google Maps is the market leader. Google also has a near monopoly with YouTube and millions of people are reliant on things like Gmail, Google Pay, Play Movies. When there are so many great alternative Android smartphone vendors, why would anyone now buy a de-featured Huawei one?

In response to these reports Android moved to stress that it will continue to support existing Huawei Android phones in the following tweet.

Meanwhile Huawei issued the following statement. “Huawei has made substantial contributions to the development and growth of Android around the world. As one of Android’s key global partners, we have worked closely with their open-source platform to develop an ecosystem that has benefitted both users and the industry.

“Huawei will continue to provide security updates and after sales services to all existing Huawei and Honor smartphone and tablet products covering those have been sold or still in stock globally. We will continue to build a safe and sustainable software ecosystem, in order to provide the best experience for all users globally.”

Huawei has reportedly been working on its own smartphone OS in anticipation of this sort of thing happening but, as Microsoft, Samsung and others have found, there seems to be little public appetite for alternative to Android and iOS. Huawei may be able to sell a proprietary platform in China, where the Play Store is restricted anyway, but internationally this move will surely see Huawei smartphone sales fall off a cliff.

“If the US ban is permanent, we predict Huawei’s global smartphone shipments will tumble -25% in 2019,” Neil Mawston of Strategy Analytics told Telecoms.com. “If Huawei cannot offer Android’s wildly popular apps, like Maps or Gmail, Huawei’s smartphone demand outside China will collapse.

“If the US ban is temporary, and lifted within weeks, Huawei’s global smartphone growth will return to positive growth fairly swiftly. Huawei offers good smartphone models at decent prices through an extensive retail network, and it should recover reasonably well if it is allowed to compete.”

“We still don’t have a clear understanding of what Google has told Huawei and what elements of the Android operating system may be restricted, so it remains unclear what the ramifications will be,” said Ben Wood of CCS Insight. “However, any disruption in getting updates to the software or the associated applications would have considerable implications for Huawei’s consumer device business.”

There have been very few official statements on the matter from US companies, so Wood is right to tread carefully at this stage, but it’s hard to see this news as anything other than catastrophic for Huawei. Its consumer business, which is the most successful unit in the company, relies largely on Android to run its products and will surely be severely diminished by the Google move.

And there’s no reason to assume the damage will be contained there. Last year Huawei’s contemporary ZTE was almost driven out of business by a ban on US companies doing business with it. Huawei may have hedged its position regarding networking components suppliers more effectively than ZTE but it will presumably suffer greatly once those companies follow suit.

Huawei is one of the biggest companies in the world and has become so in spite of being largely excluded from the US market. The Chinese state will do everything it can to support Huawei, but at least some of its US suppliers offer unique products. At the very least this puts Huawei in a weak negotiating position with potential replacement partners and international customers, but the implications of this latest development are potentially existential.

Qualcomm banks almost $5 billion from Apple and that’s just the start

In its latest quarterly earnings announcement Qualcomm revealed just some of the cash it’s trousering from Apple after winning their legal fight.

“On April 16, 2019, we entered into settlement agreements with Apple and its contract manufacturers to dismiss all outstanding litigation between the parties,” said the relevant bit of the report. “We also entered into a six-year global patent license agreement with Apple, effective as of April 1, 2019, which includes an option for Apple to extend for an additional two years, and a multi-year chipset supply agreement with Apple.

“While we continue to assess the accounting impacts of the agreements, our financial guidance for the third quarter of fiscal 2019 includes estimated revenues of $4.5 billion to $4.7 billion resulting from the settlement (which will be excluded from our Non-GAAP results), consisting of a payment from Apple and the release of our obligations to pay or refund Apple and the contract manufacturers certain customer-related liabilities.

“In addition, our financial guidance for the third quarter of fiscal 2019 includes estimated QTL revenues for royalties due from Apple and its contract manufacturers for sales made in the June 2019 quarter.”

Fiscal Q3 for Qualcomm is equivalent to financial Q2, so it covers all the initial payments Apple will make to Qualcomm as a result of their settlement. If you factor in the June quarter sales royalties that wouldn’t otherwise have been paid that should mean Qualcomm’s current account will be around $5 billion better off by the Summer.

There didn’t seem to be any details revealed about the new patent licence agreement, but the two-year backlog points to a historical rate of around $200 million per month. Given the apparently dominant negotiating position Qualcomm will have been in regarding access to its 5G products it’s easy to believe Apple will be handing over a fair bit more than that for the foreseeable future.

There was one other comment of interest in Qualcomm’s outlook. “Our financial guidance for the third quarter of fiscal 2019 also includes $150 million of QTL revenues from Huawei, which represents a minimum, non-refundable amount for royalties due by Huawei while negotiations continue. This payment does not reflect the full amount of royalties due under the underlying license agreement.”

While this is essentially a restatement of the announcement Qualcomm made a quarter ago, it implies the dispute still isn’t resolved. Aside from all this Qualcomm’s Q1 revenues were roughly in line with expectations but a relatively downbeat general outlook drove its shares down a couple of percent.