Big layoffs at Qualcomm, may split chips/licensing?

[s44]

http://www.androidauthority.com/qualcomm-layoffs-strategic-review-627091/

The 810 may go down as the biggest mobile silicon flop in history.

 

[poofyhairguy]

I look at another way, their success up until the S810 was unprecedented. It was partially their offerings, but another huge part is how hard it is for these monolith USA carriers to approve different SoCs. The market consolidated in Qualcomm out of laziness almost.

Even if they would have had a better product on the market in Q1/Q2 2015 it doesn't change the fact that now companies like Huawei can make their own chips. Other options for LTE are on the market and Samsung's Exynos is more than just a Korean experiment. The road is going to get rougher before it get easier, and so maybe a split is the best way to not sink the whole company.

 

[s44]

You're right that they really had nowhere to go but down, but things could have evolved a lot more smoothly than this. The radio tech on which Qualcomm built its empire is *still* ahead of the competition.

 

[Ancalagon44]

It's crap that decisions like whether to split the company are decided based on what will happen to the stock price, not what will happen to revenue and profit. Very short term thinking IMHO.

 

[KentState]

Licensing is going to be the next big hit when CDMA isn't necessary.

 

[WelshBloke]

It's crap that decisions like whether to split the company are decided based on what will happen to the stock price, not what will happen to revenue and profit. Very short term thinking IMHO.

Yeah you know things are going to get fucked up when you read...

The situation is further complicated by the urging of Jana Partners, an “activist hedge fund” investing in the company.

 

[darkswordsman17]

I actually think what could be triggering all of this is the investigations into the company over market share, it might be an effort to stem any big fines or anything.

And the thing is there, that wasn't Qualcomm's intention or design. They were just really successful and made better mobile modems, and then companies dropped out of that big time (a couple were bought out by others but were likely made to focus on LTE) leaving Qualcomm alone.

And Qualcomm happened to also make good SoCs, so it was a value proposition for a lot of companies to just go ahead and use a fully integrated solution, versus doing their own design (or another company's) and working to pair it with Qualcomm's modem. Qualcomm did a lot of work on the software side too from what I gather, so overall it just offered a better total solution.

I don't know, maybe there's evidence they used it to keep prices high or something, but I don't really think so. And that seems to be quickly changing as well as they face a lot of new competition.

I look at another way, their success up until the S810 was unprecedented. It was partially their offerings, but another huge part is how hard it is for these monolith USA carriers to approve different SoCs. The market consolidated in Qualcomm out of laziness almost.

Even if they would have had a better product on the market in Q1/Q2 2015 it doesn't change the fact that now companies like Huawei can make their own chips. Other options for LTE are on the market and Samsung's Exynos is more than just a Korean experiment. The road is going to get rougher before it get easier, and so maybe a split is the best way to not sink the whole company.

Yeah definitely, although I'm not sure a split helps them in any way. It seems to solely be a ploy to get money from the patents so that Wall Street gets money.

I think Qualcomm could weather this, but apparently their management really was utterly clueless about what direction to go in or something.

Licensing is going to be the next big hit when CDMA isn't necessary.

Is it? Other companies are making their own LTE modems so why would they license Qualcomms? Plus if they do license that, then its going to full on kill Qualcomm's chip sales as it'll mean they won't be buying SoCs from them.

Splitting it up just seems like its destined to kill both, and I'd guess rather quickly. But then that very well could be the point, get the money from the patents while its still worth something, and writing off the chip part ASAP.

This could be worrying too, especially for the US as I'd expect Chinese companies would be the prime ones looking to snap up people leaving from Qualcomm.

 

[KentState]

Is it? Other companies are making their own LTE modems so why would they license Qualcomms? Plus if they do license that, then its going to full on kill Qualcomm's chip sales as it'll mean they won't be buying SoCs from them.

Splitting it up just seems like its destined to kill both, and I'd guess rather quickly. But then that very well could be the point, get the money from the patents while its still worth something, and writing off the chip part ASAP.

This could be worrying too, especially for the US as I'd expect Chinese companies would be the prime ones looking to snap up people leaving from Qualcomm.

I know for instance that Verizon pays a lot of licensing fees to Qualcomm outside of chips for licensing of CDMA technology. There are also still a good number of dumb phones being sold that are not LTE. Plus don't think of this just as the chip in the end-user's phone, but the bigger picture. With CDMA technology set to phase out in the US in the next few years this will be a big hit.

 

[darkswordsman17]

I know for instance that Verizon pays a lot of licensing fees to Qualcomm outside of chips for licensing of CDMA technology. There are also still a good number of dumb phones being sold that are not LTE. Plus don't think of this just as the chip in the end-user's phone, but the bigger picture. With CDMA technology set to phase out in the US in the next few years this will be a big hit.

Oh, I misread your post. I thought you were saying by big hit it would be a positive business situation (meaning licensing out their modem portfolio). I see what you're saying and would definitely agree.