Qualcomm held its first automotive investor day last week, and Qualcomm displayed how its automotive business fits into its overall one-technology roadmap. You can read my coverage of Cristiano Amon’s keynote and my comments on Qualcomm’s financial talking points here.
At the end of Amon’s keynote and for his introduction of Nakul Duggal, Senior Vice President and General Manager of Qualcomm Automotive, Amon referred to Duggal as “the star of the show” and himself as “overhead.” For the CEO of a company to give this high of regard is truly special.
I chatted with Duggal at its investor day covering the connected, intelligent and software-driven future of automotive. Much of what Duggal talks about in tour chat directly relates to where Qualcomm is right now and how Amon can call its Automotive Investor Day its ‘Graduation day,” but more importantly, the future.
Qualcomm’s automotive play is organic
Duggal has been with Qualcomm since 1995 and started in the automotive business almost a decade ago in 2012. Qualcomm’s role in the automotive early on was to provide automotive computing components. As the automotive industry transforms to become a digitally connected industry, it trends towards much of what Qualcomm offers in other markets.
What Qualcomm has done is look into its IP portfolio across connectivity, computing, and software and implement overlapping technologies that fit the digitally transforming automotive market.
Over the past five years, Qualcomm has built out its automotive business based on its one technology roadmap. Qualcomm’s one technology roadmap is its strategy to create technologies that can scale up into other markets. Whether that is in connectivity, computing, or software, Qualcomm builds its technology on a scalable architecture. Qualcomm has adopted technologies from what it has done with smartphones. If the name “Snapdragon Digital Chassis” does not ring a bell, Snapdragon is the name of Qualcomm’s mobile SoC platform. One of the reasons Duggal says that Qualcomm’s automotive business is organic is because many of the automotive digital trends are similar or the same as the mobile trends.
As the automotive industry transforms digitally, automakers do not have the capability to address these digital trends. Duggal addressed the trend of how cars need to be more aware and intelligent of its surrounding. It needs to be connected to networks that provide environmental and safety information. Vehicles require low latency and always connected infrastructure. Vehicles are also transforming towards an electrified chassis, and it is accelerating the need for an electrical architecture or a software-defined vehicle, which Qualcomm refers to as a Digital Chassis. The vehicle architecture of the past consisted of a distributed microcontroller-centric architecture whereas the future software-defined vehicle adopts more of an integrated and simplified architecture.
This new software-defined architecture resembles a lot of what we see in the mobile world, where Qualcomm is a leader in mobile SoCs. While this new software-defined vehicle architecture looks to kick out automakers, I believe it does just the opposite. Duggal pointed out how the software-defined vehicle enables the automaker brand to be at the center of the vehicle with automaker-controlled services and software. I believe this is incredibly disruptive for the automotive industry because it unlocks a whole other revenue source of services. As Duggal said, “it is on the tip of the iceberg” referring to the potential vehicle services have on digitally transformed vehicles.
Duggal mentioned that Qualcomm’s total addressable market within the automotive industry could be $100 billion by the end of 2030 and that Qualcomm already has a design-win pipeline of $30 billion.
Automotive connectivity is a pivotal technology in the digital transformation of vehicles. Software-defined vehicles connect to the cloud, through WiFi, Bluetooth, GPS and 5G, Cellular V2x and many other connectivity standards. Without these connectivity standards, software-defined vehicles would be limited in providing safety features, user experiences, environment awareness capabilities, and a plethora of digitally transformed services.
Qualcomm’s experience and leadership in connectivity translate to its leadership in automotive connectivity. Qualcomm is already and leader in automotive connectivity with over 250 million vehicles with Qualcomm’s cellular connectivity and more transitioning to 5G connectivity. Qualcomm has also pioneered the Cellular-vehicle to everything(C-V2X) standard. C-V2X is a high-speed, low-latency connectivity for vehicles to connect to everything so that vehicles are connected to vehicles, people, infrastructure, and even pedestrians. Duggal mentioned that we are starting to see C-V2X in multiple markets.
One strength that I believe makes Qualcomm unique and able to execute these types of standards and even do it years ahead of what’s planned is Qualcomm’s focus on relationships. If you noticed at Automotive Investor Day, Qualcomm had many big-name speakers sprinkled throughout the event from BMW, BYD Auto, GM, Google, Great Wall Motors, and Honda.
#1 in digital cockpit
The technology that is most familiar to automakers would be the digital cockpit. The digital cockpit is the modern-day “dashboard” with an enhanced user experience. Qualcomm started its digital cockpit journey in 2017 and is in its 4th generation SoC with more integration.
What Qualcomm is doing with its digital cockpit is what would be referred to as ambient intelligence in the IoT space. Qualcomm is introducing safety and user experience features into its digital cockpit that enhance the digital cockpit for the riders.
This is very similar to the SoC of a smartphone and what Qualcomm is doing with mobile devices. Qualcomm has teams that have worked on mobile camera ISPs that are now engineering these ISPs with the same technology and IP to scale up and meet the safety requirements of a car. As Qualcomm has integrated more into every generation of its automotive SoC, it has opened more tiers of the SoC so that automakers can choose affordable and luxury SoCs.
These tiers are not only differentiated for in the cabin with the digital cockpit but also with advanced driver assistance systems (ADAS) and automated driving (AD) from level 1( L1) with safety features to level 5 (L5) with fully automated driving. Qualcomm acquired Arriver around this time last year, and you can read my coverage of Qualcomm’s ADAS announcement here. Qualcomm’s Ride and Ride Vision System are designed with modularity so that these different tiered ADAS and AD systems can be co-designed with automakers and even upgraded down the road.
Qualcomm introduced the industry’s first unified automotive SoC architecture that combines assistance, automated driving, and networking functions on one software-defined architecture. Qualcomm has made it scalable for higher and lower end vehicles. While Duggal said more will be shared at CES 2023, I believe this announcement shows the moment of Qualcomm’s automotive business.
Duggal pointed out that one major difference between the mobile platform and the automotive platform is that, alongside general purpose software, automotive must accommodate for safety software. Duggal said, “unlike in the mobile space, where it’s mostly a silicon conversation, in automotive, it’s silicon plus a tremendous amount of platform software. I believe this understanding is critical, not only for the success of the digital cockpit but also the safety of the vehicle. It took Qualcomm years to tune and et right how platform software reacts and fits on top of existing integrations. One example that Duggal gave was what would happen when an Android app crashes. If it crashes and takes the rest of the system down with it in motion, it becomes a huge problem.
Qualcomm with its platform software then becomes the host for multiple markets and geographical locations. Qualcomm could take its platform software and follow compliance and safety protocols within that area and do the same thing in another area. The same is true for automakers to differentiate themselves within the cockpit with software, apps, and services on top of Qualcomm’s platform software.
Although Qualcomm’s automotive business is organic, it did not come without a calculated strategy and thought of how to implement existing IP. The digital automotive play is impossible without careful consideration of safety requirements, both for hardware, software, and connectivity. While thoughts and ideas do not just come from the higher-ups, the execution of it is from the thought leadership of Qualcomm Automotive. And, yes, I’m looking at you Duggal.
Qualcomm has shown that it is capable of scaling its technology into the digitally transformed automotive market and meet the safety requirements needed. I believe Duggal, the $30B man, and thought leadership have strategically positioned Qualcomm to organically take on this new market with existing scalable technology and partnerships that lead to design wins.
Qualcomm’s leadership in connectivity has enabled it to pioneer in new automotive connectivity technologies like C-V2X. Its leadership in high-performance, low power computing and strategic acquisition of Arriver has enabled it to accelerate its ADAS/AD offerings, and I believe it has been strategic with implementing safety into its software stack. Graduation day for Qualcomm Automotive shows considerable promise and now I am excited to see more of Qualcomm’s fully integrated SoC at CES 2023. Great job Duggal and Qualcomm Automotive.
Note: Moor Insights & Strategy co-op Jacob Freyman contributed to this article.