On this episode of The Six Five – Insiders Edition Daniel Newman and I are joined by Alex Katouzian, Senior Vice President and General Manager for the Mobile, Compute and Infrastructure Business Units for Qualcomm. Alex is leading the global unit organization that drives mobile, compute, infrastructure, and AI on devices. It’s a huge unit that is delivering technology advancements at a rapid pace that enables us to live and work easily wherever we are.
Our conversation covered several aspects of the current status of the 5G for Qualcomm with a quick review of 2020, some exciting new announcements and where Alex thinks Qualcomm will be heading in 2021. 2020 was a breakout year for Qualcomm and 5G. We saw an estimated 180 to 220 million 5G-enabled handsets coming to market. Alex shared that we will likely see 450 to 550 million additional units coming to market this year. The developments will be exciting to watch.
New Snapdragon Series 4 and Other Developments for 2021
Our conversation with Alex also revolved around the following:
- Qualcomm’s Snapdragon Series 4 release.
- Why the Series 4 announcement plays such an important part of the continued 5G expansion.
- How the events of 2020 enabled the 5G expansion.
- An exploration of the price point of Series 4 and if that will make a difference for what consumers experience in terms of speed and compute.
- How OEMs are reacting to the Series 4 news.
What 2021 Will Hold for 5G
We are watching OEMs expand their use of 5G technology in consumer devices. These advancements in mobile are likely going to affect so many different sectors as more people take advantage of the technology developments. So many aspects of our lives are tied to our mobile devices and having better connectivity with 5G will transform the way we live. Every time we talk to someone from Qualcomm, we are continually awed by the advancements the company is making. It will be interesting to see where they go in 2021 and beyond. You know that we will be watching. If you’d like to hear more about the advancements that intel is making be sure to listen to the episode.
Watch our interview with Alex here:
Daniel Newman: Welcome to the Six Five Podcast live, kicking off 2021. First edition back for the year with a special Insider’s Podcast. Daniel Newman here, principal analyst and founding partner at Futurum Research joined by my always esteemed co-host Patrick Moorhead of Moor Insights and Strategy. Patrick, welcome to 2021. How are you doing today?
Patrick Moorhead: I am doing absolutely wonderful. It’s great to be back. I did a little skiing, socially distanced. Trust me, if you saw me on a ski slopes, you would want to be away from me anyway. But it’s good to be back in Tech Sys. And that’s T-E-C-H S-Y-S for those who are wondering how to spell that.
Daniel Newman: Yeah, absolutely. I’m trademarking that by the way, Austin, Tech Sys. I actually happened to make a little jot down to myself and maybe I bought some property and I’m planning to move down there, but we won’t waste a good show on all that story. We got a great show today that we are super thrilled about. We’re excited that our first podcast of 2021 is a Six Five insider’s edition podcasts and we have Qualcomm joining us today. Alex Katouzian, the SVP and GM and we’ll give him a chance to fully introduce himself. He leads mobile compute infrastructure, big role, big on stage. If you ever been to the tech summit and we know a lot of our audience is regulars in the industry so you might know Alex. But Qualcomm didn’t waste any time, Pat. Straight out the gate, first day back. I know it’s the 4th of January, but for many of you, if you’re anything like us, this is the first. Today is the 1st of January. We’re going to have Alex join us for a big show. Big announcement. Pat. I don’t know, but I’m pretty excited to have this conversation.
Patrick Moorhead: Let’s do it. Let’s bring on Mr. Arms himself, Alex Katouzian. How you doing Alex?
Alex Katouzian: I’m doing really well. Thank you. Happy New Year to everyone.
Patrick Moorhead: Yeah, you too. You too. You have a pretty good holiday? You have a little bit of time to relax? Between launching products.
Alex Katouzian: Yes, yes. And this year was a particularly busy for us. We’ve done a big splash on 5G and introduced a lot of parts. I’m very happy to introduce this one at the beginning of the year. And it’s a significant introduction for us because it gives us access to so many different users around the globe with the introduction of the 4 Series.
Patrick Moorhead: Excellent.
Daniel Newman: No teasing, of course, we’re going to ask you some questions and we’re going to get more into that announcement, Alex, but I introduced your title, but we all know you play a lot of parts at Qualcomm. Like I said, besides Mr. Arms as Pat called, clearly a fitness guy, but you can’t really see that fully from the screen here, but at Qualcomm you hold a lot of roles. You lead a lot of groups and just for our audience and for the few that probably haven’t had a chance to meet you, give them a day in the life and just tell them about Alex Katouzian.
Alex Katouzian: Sure, no problem. We have five business units at Qualcomm that run the chip portion of Qualcomm. And my business used to be called mobile. It wasn’t descriptive enough because it’s absolutely true, we have the mobile portion of the business in the group that I lead, but we also have compute in terms of actual Windows on ARM or windows on Snapdragon based devices and as well as XR based solutions. And then we have infrastructure, which is combined capabilities of regular infrastructure products. We introduced us getting into the infrastructure business with cell site modems, as well as small cells. We have small cells and we have a mobile broadband business for embedded based solutions. And then in addition to that, we have inference AI solutions for servers in the cloud.
If we combined mobile compute and infrastructure as an MCI, that is the title for the business unit. And that’s what I do on a daily basis. I jump from mobile, to XR, to compute, to infrastructure, to AI and we all combine it because we have a lot of reuse based on the mobile IP that we create on a yearly basis. We spend somewhere in the neighborhood of $5 billion a year in R and D and reusing what we have in mobile is absolutely the strategy. We take a big risk and we invent in mobile, we have a big channel to distribute that. And then we take advantage of those IP and inventions, we reuse them in new businesses to expand our business from mobile to the expansions on the adjacent side.
Patrick Moorhead: Yeah, I have found it fascinating how Qualcomm has taken its energy centric designs and moved into the higher performance areas specifically into inference in the data center, but also for notebooks, Windows notebooks and things like Chromebooks. It’s been awesome to watch the two sides of the industry going after the same thing. But hey, before we dive into the new stuff, can we look back to 2020? 2020 was a breakout 5G year for you and can you talk a little bit about some of the highlights in 2020 with Snapdragon?
Alex Katouzian: Yeah, absolutely. We started deploying 5G in 2019 and this was the first time, it was the first time that in all of the G’s I’ve been through all the G’s and it was the first time that the end user product was actually done and ready before all the infrastructure has been deployed and is in full use across the globe. It’s a unique position to be in because it allows developers to have end user equipment in their hands and think about developing services and applications from the ground up with 5G in mind. And so in 2020, it was a breakout year, like you said and those estimates of having somewhere between 180 million to 220 million handsets and end user equipment coming into the market. And in 21, we’re estimating somewhere between 450 to 550 million units. It’s a pretty big growth in 2021.
But in 2020, just like you said, it was established that 5G is here. 5G is stable. 5G is going to be growing quite a bit in the industry. And we have so many different economic sectors being affected by 5G, not just handsets, just like you talked about tablets and PCs and automotive, IoT, medical, private networks, manufacturing capabilities. All of those things are being affected by 5G. And I think more and more as people think about what type of services to bring and which industries are going to take advantage of 5G, you’re going to see all of these applications coming together.
Daniel Newman: Yeah, it was a really, really big year and the company absolutely had a breakout. A lot to be proud of in terms of its numbers and metrics. Also, I think all the hype started to become reality for a lot of the market. And while 2020 certainly presented the world with its share of challenges, it also had the world paying attention in a way it had never before, as we became less physically mobile, we became more dependent than ever on connectivity. And I think we really saw the benefit of that. And although I have another question to ask you specifically, I have to figure you probably saw that quite a bit on your end that the whole landscape and the attention being paid to what connectivity did was really unnoticed in 2020.
Alex Katouzian: Yeah, absolutely. And with people staying at home, working from home, the connectivity piece of their equipment became so important for them. And I think it’s going to continue to be that way. I’ll just take the PC example. Being on calls all the time, it’s a great application for 5G. And what you do want to have is that connectivity and security from anywhere you want to work with. Just sitting behind a desk may not be something you want to do. Maybe you want to walk outside. Maybe you want to work from your backyard. Maybe you want to work from a park. All of those things would be available with strong connectivity. You may do a video call from your phone, you want it to have connectivity availability from wherever you are. It becomes a lot more important as to how securely and from many different points of view where you can connect and do your work and be productive.
And with 5G coming around and more and more people having 5G phones in their hands, one of the top uses is video. Streaming video, uploading video, downloading video, being able to share video on social sites, all of these things. They’re very common use cases now. And if you go back a few years, what happened when 3G started rolling around, audio with big use case, you could stream music and listen to music from even the edge of the network where connectivity wasn’t quite as robust as it is in the center. But streaming music was perfectly fine on 3G and 4G became much better. Video became much better on 4G. Now you can stream video and have upload and download a video or conferencing a video, even on the edge cell with 5G. That’s one of the big use cases.
Daniel Newman: I had to ask you just because I imagine it was a big part, but I do want to get onto your news too, which is really big. And I kind of teased it in the introduction, Alex, but first work day of the year, first open market day of the year, Qualcomm, I think right at the market open in fact, dropped some big news. Share with our audience what that was.
Alex Katouzian: Yes. This is the introduction of the Snapdragon 480 Mobile Platform and the significance of it in the 4 Series, we introduced the 888. Before that we had the 865 coupled with our X55 modem for 5G. We introduced 7 Series. We had the 765 and 765G and now we have a 4 Series device coming through, the 480. And the significance of that is that gives us access to about three and a half billion users in multiple geographic locations. And the significance is the affordability that this chipset solution and software brings to the industry. And it is going to be enabling 5G phones, in my opinion, starting from the mid-$200 range and up. And that means more affordable 5G phones with better and better features coming to market and allowing users to have that fiber connectivity and that capability with them in an affordable price.
And that’s significant because as we look at the trend across geographical regions, every user in every tier, after a while starts to upgrade their capabilities to the next level and the next level. Mid-tier users, maybe after three or four years, they want to upgrade to high tier phones. High tier phone users after three or four years, will upgrade to premium tier phones. And so allowing features and functions to waterfall from our 8 Series down to the 4 Series and making it affordable for people to have capabilities that they’ve never had before is one of the ultimate goals for introducing the 480. And I think we’ve achieved that. Like I said, we’re going to have big use of 5G in 2021, anywhere between 450 to 550 million phones being sold in 2021, it’s a 150% growth versus 2020. Having the 480 in the mix will allow us to make 5G affordable for the mass user and that was the ultimate goal for the 480.
Patrick Moorhead: Yeah, so essentially people get, let’s say a $125 to a $250 handset, they can get millimeter wave and sub-6?
Alex Katouzian: Yes. This device will support both millimeter wave and sub-6.
Patrick Moorhead: One of the challenges when you have a robust, lower end is that you have to also give people a reason to buy your highest end. If you can, for the audience, simply talk about why would I keep buying an 8 Series if I can get all this goodness with the 4 Series?
Alex Katouzian: Yeah. The good thing about our mobile industry is that every year all of the ecosystem players push the limits of performance and capabilities of these handsets year after year. It is incredible what we’ve been able to achieve in the past few years on upgradability of features and functions. Today, we have 6.7 inch displays running 2K resolution. You have 120, 140 Hertz displays running mobile gaming capabilities and multiplayer user games that are very realistic. We have camera capability much better than DSLRs. We have very fast processing capability, both in CPU, GPU and AI. AI functionalities, for example, live translate of speech and conversation is going to become more and more of a norm. AI spreading into almost all applications that you’re using on a daily basis is becoming more of a norm. People don’t even know it. Being able to use AI and detect the best scenes for photography and capturing video happens automatically without users knowing. All of this takes processing power.
And if you take a look at the latest premium tier solutions that are going to start to come out with the 888 in 2021, you’re going to see a lot of those applications. The users that have been using premium tier phones are expecting better and better performance from their phones every time they invest in a premium tier phone. And the length of time that people are keeping their phones now has grown more and more. We’re talking about three, maybe four years before people decide to switch phones now. And so they’re expecting to have a premium tier phone in their hands that will last them three to four years, which means better and better performance. There is a difference in affordability and functionality of an 8 Series and a 4 Series but for the first time, we’re now introducing some of these waterfall features faster than ever before.
If I may give you a little bit of background as to how we think about and develop an 8 Series versus a 4 Series. It takes us about three years to complete and bring to market an 8 Series phone. We start thinking about forward looking features and functions about three years before we introduce an 8 Series device. We think ahead in standards, we think ahead in use cases, we think ahead in integration capability, we think ahead about performance and what people are going to need, what consumers are going to be using in the next two or three years. And we define those functions and we figure out how to integrate those functions best in an SOC and choose a process technology along the way. Once we do that and we design the chipset, it takes about a year to get that back, get it tested, work with the ecosystem partners and our OEM partners and finally bring a product to the consumer.
What we do in the course of time, we take about six months to a year to waterfall features down. That’s kind of been accelerated now. We have a premium tier almost coming out with a high tier chipset almost at the same time now. And then three months later, we go to a 6 Series. And then three months after that, we go to a 4 Series. 12 to 18 months has now been compressed to about six to nine months. And what that does is it allows us to bring features and functions that were never available in an affordable 4 Series, much faster than before and make it affordable for people to use. And we’ve picked a few that we think are absolutely necessary, even in an affordable phone, that’s going to cost you somewhere in between 150 to $250. Having global connectivity, best global connectivity capable on a phone is a number one priority.
Having a display that has a high refresh rate for better use cases and better gaming is a very good thing to have. Having the best photography capable, meaning instead of having one image signal processor for a camera, we’ve made three of them available simultaneously. Now you can capture a regular photo, a wide angle photo and a zoom photo all at the same time. To be able to now distinguish between what is the best that you want to capture and an AI based capable algorithm to be able to pick that for you. Having quick charge capability. If you look at what consumers care about the most, battery life is consistently been number one. And when they understand that the battery life is good and the battery goes low, they want to know how fast they can charge it. Anything related to battery life and the length of which you can use the phone is one of the top priorities for consumers. We have that too. Quick Charge 4+ is now available on the 480 Snapdragon.
Patrick Moorhead: I’m convinced. You sound like you’ve done a lot of thinking of kind of good, better, best in your lineup.
Daniel Newman: Pat, you and I like to talk about cars a lot, but it kind of brings me back to the thought process of you look at a German automaker like a BMW, there’s an 8 Series and there’s a 1 Series and they’re both BMWs, but the exact sets and features and deliverables. You get a lot of the key experiences. They try to pack in that it’s a driver’s car into every version, but at the same time that 7 or 8 Series is going to have some things at that 1 or 2 Series is not. And I think it sounds like that’s kind of the thought process here is having some in a number of the really key and critical deliverables, but concurrently leaving some opportunity for those high end OEMs to distinguish which is, and I’ll let you touch on this, but I want to get you into the next question. And maybe you can skip on this one too, but it is really about the OEMs because you guys give the platform. You give the platform to all these device makers that partner with Qualcomm.
They have to be excited about this though, because this expands the arsenal. It’s like giving a new engine. It’s like giving a new, here’s a new engine to play with for your 1 Series or 2. You know what I’m saying? I just used that analogy, but what’s the reaction been? How do you see this scaling and impacting volume? Because that’s the first thing that came to mind for me, Alex, is volume. This is going to bring scale to 5G.
Alex Katouzian: That’s right. That the OEM’s love the fact that we have the breadth of the roadmap that they see. They can introduce a premium tier model. They can introduce a low tier high volume model and everything in between. They really love it. And the fact that there’s a lot of reuse between tiers and software compatibility between some tiers is a great advantage for them. Just like every other business, you mentioned the car business, they make a premium tier solution for the market that needs it and they make a mass tier solution for the market that needs it. And scale is very important, just exactly the same for us. We have our 4 Series devices and our 6 Series devices for scale and we have our 8 Series and 7 Series devices for performance related solutions. And I think all of the OEMs, this is an ecosystem play.
The OEMs like to have that scale and they utilize the ecosystem of developers to develop apps for their products as well. We do that as well. We have programs that we start before the parts come out. We go out and talk to app developers and service providers of what’s going to come and get them involved in even sometimes defining some of the features and functions for these devices. And as soon as the parts are available and are on reference platforms, we provide those reference platforms to these developers and we help them write their apps and their services on top of our hardware and take advantage of that acceleration that we have in there. We introduce that back to the OEMs and we get the whole ecosystem working together that way. It’s a evolving process, but it’s all connected that way. The OEMs love the fact that there’s a big amount of roadmap chipsets to choose from. They love the scale and they love the fact that we help them with the ecosystem of apps and services after that.
Patrick Moorhead: Yeah, Qualcomm always has been that orchestrator for the entire mobile business, being the matchmaker between OEM, carrier and ISV. And you’ve taken this from high end, to mid-range, to entry level and listen, every market needs a good, better, best. It needs to be very well thought out. And what I’m most impressed about is that you’ve shrunk the time to waterfall if I heard that correctly from years to months and I think that’s pretty awesome because with innovation really makes the world go around.
Alex, we’re talking about the here and now, but there’s a lot of things that you do out there in the future. I’m not asking you about your roadmap. I would get punched by your PR team so I won’t. But you are one of the leading global voices of 5G. How do you see the year shaping up for 5G, connectivity and mobile as a whole? What I love about Qualcomm is you’ve already put your forecast out for 5G phones for 2021. And I remember following you for 2020 and you stuck to your guns. I think it was a quarter of a million handsets and you hit it, which was awesome. But overall 5G, connectivity, mobile as a whole for 2021, what do we need to be thinking about?
Alex Katouzian: I think mobile is going to affect so many different sectors and I think people will take advantage of it even more now that we’re going through these pandemic changes. And again, I think the phone is an essential tool that people just can’t do without any more. So many aspects of your life is tied to it. And having that connectivity with 5G makes it even more secure and a bigger bandwidth for people to take advantage of. Looking at different sectors, I think the PC industry is moving more and more, much more towards having a mobile based solution than they did before. And I have to say, when you have a over $2 trillion company backing what we’ve been saying for the past three or four years, it validates everything. That’s a good thing for the consumers.
I think that the auto industry is going to move very fast towards having 5G connectivity. I don’t think there’s any SKUs of any cars that are coming out that don’t have mobile connectivity in them. And with 5G, I think you have a big leap forward in terms of data throughput. Some car manufacturers have up to three modems inside the car. And one is for diagnostics and downloading of software, which is dedicated. One is dedicated for emergency situations and the other one is dedicated for infotainment. And I think there’s huge amounts of data that goes back and forth for the car industry. And I think that would be an ideal thing for connectivity and growth of 5G in that sector.
I could see the private networks starting to come up quite a bit. Private networks for manufacturing capabilities and allowing manufacturers to set up floors that is controlled by a 5G private network that has the bandwidth and it has the latency to meet the application needs are super important. And I think as they think about what to do on 5G and how to upgrade the manufacturing capabilities of plants that way, you’re going to see a lot more of those applications coming through.
I think also the mobile gaming industry will take big advantage of 5G and that’s the fastest growing segment of all gaming put together. I think it’s bigger than all of them put together actually. I think it’s over 51% of the revenues of the gaming industry. And multiplayer gaming, especially in these time, is becoming a social event. People are meeting and they’re talking to each other and they’re going through those games and you need to have that capability with you wherever you are. And I think 5G will play a big role in there, especially for throughput of data, as well as latency of interaction. That’s going to become big.
Social networks are going to start to change. Live social networks with feeds and downloads and uploads of videos that are going to be almost instantaneous are going to take advantage of 5G. There’s lots and lots of different applications that we can think of. Again, back to making sure that we have the IP and the capability for mobile and then applying that mobile capability into adjacent markets that can take advantage of it.
Daniel Newman: And you make a lot of great points there and I do love that you brought it back to cars because again, man after my heart. Games, I like them not as much as our kids do anymore, but still a lot of fun. And so much of what you said did have the under tone of kind of the coronavirus year that we had and people doing more things remotely. That’s not going to change for the foreseeable future, which did give a really strong roadmap forward for adoption of some of these things, whether that’s you see the Twitches where people are on video playing games in the backseat of their vehicle, that’s driving them autonomously from one destination to the next.
I think it’s an exciting year ahead, Alex and we got to let you go. It’s been great having you on the show, but just before we let you go, I just want to say thank you so much for joining us, on the day of your big announcement, sharing with the world. We’re thrilled. I’ve been touting 5G, the year of 5G for the last three years because I am a futurist and I continue to believe adoption will always happen faster, but it really does feel like what you’re doing is going to drive a really exciting future of 5G. Thanks so much for joining, Patrick.
Patrick Moorhead: Thanks, Alex.
Alex Katouzian: I really appreciate it, gentlemen. I really appreciate it. And I’d love to come back and talk to you more as we do more announcements and just talk about technology maybe.
Patrick Moorhead: Absolutely. I love it. I’m excited for this year and again, Alex, thank you so much.
Alex Katouzian: Maybe I’ll visit Tech Sys one time.
Patrick Moorhead: Yes. Spelled it correct. That’s right.
Daniel Newman: We look forward to it. That was great.
Patrick Moorhead: What a show. No, I know. I know. Literally first day back, we literally get the person in charge of some of the coolest, well, if the not coolest mobile technology on the planet. I think that’s pretty awesome.
Daniel Newman: Yeah, Pat, I think you and I, as analysts that have a lot of access have had the benefit of playing with some of these technologies a little longer than the world has, but when you start using millimeter wave 5G in our everyday lives and we start to feel what that means in terms of jumping on a video, playing a game, watching a movie, I love the whole right before the flight takes off, getting that Netflix download real quick. Couldn’t do it on LTE, but 5G makes it possible. And with technology being unequal, inequality around the world, this really does sound like a vehicle. Kind of like when Chromebooks started to become available for students and stuff in lower end communities without credit, all this stuff, it excites me a lot. It really makes me feel like 2021’s got a lot of promise.
Patrick Moorhead: Yeah. On one hand, this notion of a $125 5G phone gets me excited for the reasons you talked about, the accessibility. But also if you haven’t tried 240 Hertz display, you really have to see it to believe it. It’s like it’s there. I’ve fallen in love with a 120 Hertz displays that are out there. And there are features that I would give up to have that. And it’s big on the Samsung lineup and I just love it.
Daniel Newman: What a great year ahead. It’s been a challenge for a lot of people and we’re not going to, but if you love tech, I just have a feeling we’ve got a great year ahead. Semiconductors will continue to eat the world, Pat. Assassin chips like we like to talk about, but all things connected. And Alex really did a good job of directly and indirectly illustrating that throughout our podcast. I’ll let you take it home from here, Pat, but what a show. Thanks everyone for tuning in.
Patrick Moorhead: Yeah. If you like what you heard today, press that subscribe button. And we’re probably going to be up for a 100, maybe a 150 videocasts in 2021. Thank you again for an amazing 2020 and we look forward to seeing you this year.