Is Qualcomm Inc. Overhyping the Snapdragon 820?

Qualcomm's high-end smartphone chip business has deteriorated significantly over the last year or so. Part of it is due to the fact that Apple , which designs its own chips, has gained substantial share at the high end of the market.

The company's high-end chip business has also suffered as Samsung , which has traditionally used Qualcomm's chips in some versions of its flagship Galaxy S/Galaxy Note phones, opted to use its own home-grown processors for this product cycle rather than Qualcomm's Snapdragon 810.

Qualcomm is hoping to make a big comeback with its Snapdragon 820 processor, and it has been out in full force promoting this new chip. Although I certainly believe the 820 will be an excellent mobile chip, I'm not sure I completely buy one of the key claims that the company is making with respect to the Snapdragon 820's CPU performance.

Qualcomm is publicly saying that CPU performance doubles from the 810, but ...In public statements, Qualcomm has said that the Snapdragon 820's Kryo CPU will offer twice the performance and twice the efficiency of the Cortex A57 core found inside of the prior generation Snapdragon 810.

What is interesting, though, is that ahead of the releases of its latest chips, the company has historically provided reference tablets and/or smartphones for review sites to test. This time around, though, those of us on the outside can only rely on the statements that Qualcomm PR is making with respect to performance.

To make things even more interesting, a slide discussing the improvements of the Snapdragon 820 (MSM8996) over the Snapdragon 810 (MSM8994) leaked ahead of Qualcomm's public disclosures. In that slide, Qualcomm said that CPU performance improved by roughly 35% from the Snapdragon 810.

Wait a minute, can both claims be true?I believe that both claims here are true. The 35% performance improvement in the leaked slide probably refers to the peak CPU performance that the Snapdragon 820 should be able to deliver, while I suspect that the "twice the performance" claim refers to sustained performance.

Indeed, if you've been following the drama around the Snapdragon 810, you might have heard that the Snapdragon 810 has trouble sustaining anything close to its peak level of CPU performance.

For example, in Ars Technica's testing of the Snapdragon 810, the tech website found that the chip throttles substantially under full load after about a minute, with CPU frequency plunging from around 1.9GHz to less than 1GHz in that time.

This means that, in theory, as long as the Snapdragon 820 can deliver sustained CPU performance that's roughly equivalent to what the Snapdragon 810 does at peak, the company's claim of "up to twice the performance" of the Snapdragon 810 is factually accurate.

What does this mean for investors?At the end of the day, Qualcomm has been and continues to be the leading merchant vendor of high-end mobile applications processors, and that doesn't look like it's going to change anytime soon.

The only thing, in my view, that matters is whether the chip is good enough to win spots inside of Samsung's next flagships -- the Galaxy S7 and the Galaxy Note 6. If it can, then the 820 will, in my view, have been properly engineered and sufficiently competitive. If not, then Qualcomm's high-end chip business will still likely continue to remain in a funk.

The article Is Qualcomm Inc. Overhyping the Snapdragon 820? originally appeared on Fool.com.

Ashraf Eassa owns shares of Qualcomm. The Motley Fool owns shares of and recommends 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.