Qualcomm Inc. Turns Up the Heat in the Smartphone Chip Market

By Markets Fool.com

In a prior piece, I took a look at some of the difficulties that mobile chip giant Qualcomm was facing in the mid-range of the smartphone market. Chief rival, MediaTek, had seemingly delivered a mid-range system-on-chip that looked superior to the best Qualcomm mid-range parts.

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It seems, however, that Qualcomm is striking back with the next iterations of its Snapdragon 600-series processors: Snapdragon 618/620.

Looking at the specs of these two chips
First, let's look at the Snapdragon 618. According to the company website, this chip features two ARM Cortex A72 cores at 1.8GHz and four 1.2GHz ARM Cortex A53s in big.LITTLE configuration. It supports a "next generation Adreno GPU," an integrated category 7 LTE-Advanced modem (300 Mbps download/100 Mbps upload) and dual image signal processors which support 21 megapixel cameras. It also supports HEVC/H.265 video encode and decode.

The Snapdragon 620 looks essentially the same as the Snapdragon 618 but with four Cortex A72 cores instead of two. I would also not be surprised to see the 620 feature a beefier graphics processor as well, when more details on the GPU are released.

These look like fantastic chips
The Snapdragon 618 and 620 look like fantastic mid-range processors. In fact, the feature-sets on these chips are quite high-end by current standards. Performance across all the important metrics should be best-in-class based on these specifications. I am also impressed that Qualcomm will be able to bring these chips to market by the second half of 2015.

Disrupt the mid-range (and low end) with high-end technology
As a merchant chip vendor, Qualcomm has products that address every segment of the market, from the low-end to the bleeding edge. However, the high-end of the smartphone market is dominated by Appleand to a seemingly decreasing extent, Samsung.

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While I do expect Qualcomm to continue to develop and sell parts into the very high-end, I suspect the majority of the volume that will be open to Qualcomm will come from the low-end and mid-range. These segments are fiercely competitive, as we have seen with the blows MediaTek has been able to land on Qualcomm.

So, what Qualcomm seems to be doing is bringing its full might to the mid-range of the mobile market. For example, these mid-range chips (Snapdragon 618/620) will feature more advanced modem technology than even the high end Snapdragon 808/810 parts. While I suspect the follow on to the 808/810 will retake the lead in terms of performance and features, it is clear that Qualcomm is now taking the mid-range far more seriously than it did with the prior generation.

Also, while I did not discuss it here, Qualcomm seems to be getting very aggressive with its low-end modems, too. In this segment, Qualcomm has its new Snapdragon 415/425. The company is offering two parts: the 415 with a relatively low-end category 4 modem and the 425 which integrates the same high-end modem found inside of the Snapdragon 618/620.

This is the right strategy, and I think the new Qualcomm chips should do very well in the market.

The article Qualcomm Inc. Turns Up the Heat in the Smartphone Chip Market originally appeared on Fool.com.

Ashraf Eassa owns shares of ARM Holdings and Qualcomm. The Motley Fool recommends Apple. The Motley Fool owns shares of Apple and Qualcomm. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.