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Digging into Qualcomm’s RFFE Portfolio Expansions – Futurum Tech Webcast Interview Series
by Daniel Newman | November 12, 2021

On this episode of the Futurum Tech Webcast – Interview Series, I am joined by Christian Block, SVP & GM, RFFE, QUALCOMM Germany RFFE GmbH, for conversation around the latest happenings with Qualcomm’s RFFE portfolio.

Digging into Qualcomm’s RFFE Portfolio Expansions

In our conversation we discussed the following:

  • Why the latest RFFE expansions are so important for continued growth
  • An exploration of why Qualcomm’s role in the RFFE space is critical for areas like IoT and automotive
  • What is driving the RFFE growth
  • What catalysts we can expect to see to continue to drive growth

It was an excellent conversation with several of insightful tidbits. If you are interested in learning more about Qualcomm’s RFFE portfolio, be sure to check out their website.

Watch my interview with Christian here:

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Disclaimer: The Futurum Tech Webcast is for information and entertainment purposes only. Over the course of this webcast, we may talk about companies that are publicly traded and we may even reference that fact and their equity share price, but please do not take anything that we say as a recommendation about what you should do with your investment dollars. We are not investment advisors and we do not ask that you treat us as such.

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Transcript:

Daniel Newman: Hey everybody. Welcome back to another episode of the Futurum Tech Webcast. I’m Daniel Newman, your host, Principal Analyst, Founding Partner at Futurum Research. Excited for this interview series where I will be joined by Christian Block, SVP and GM of the RFFE Business at Qualcomm QCT. He’ll be joining the show in just a minute. And we’re going to talk a little bit about this business, because it’s been exciting. It’s been fast-growing, and if you saw me most recently on Yahoo Finance or in my opinion piece on MarketWatch, you’ll see I’m very bullish on this particular business unit.

I do have to do the disclaimers really quickly. This show is for information and entertainment purposes only. And while we will be talking to, with, and about publicly traded companies, please do not take anything we say here as investment advice. And we, of course, appreciate our partner Qualcomm for being part of this show. So without further ado, Christian Block, welcome to the Futurum Tech Webcast. Christian…

Christian Block: Hello, everybody. Hi.

Daniel Newman: Great to have you here. I really appreciate you taking some time. Hopefully, you heard in the setup, we’ve been following what you’re doing in the business very, very closely, and so we’re going to talk about that. But beforehand, I gave everybody your title, told everybody what you do, but anytime someone joins the Futurum Tech Webcast, especially for the first time, I love to just hear from them about their job, what they’re doing at the company, a little bit about what that means day in and day out. So if you don’t mind just giving everyone the background on your role at Qualcomm.

Christian Block: Yeah, I joined Qualcomm a little more than four years ago, so coming from TDK. And I started in Qualcomm with a vision that we will go to make a change in the RF front-end for the 5G and beyond. And I’m leading this group since the beginning, I joined Qualcomm. It’s a business which has been growing up year by year and with a big team, a lot of talent. And I’m really proud to be now in a system company showing that we can do different in our front-end.

Daniel Newman: Absolutely. And you just have to be thrilled about the growth. One of the highlights I had in that recent piece, I mention in MarketWatch, I was looking at what are some of the companies that are most likely to hit mega-cap over the next couple of years, and that’s the over 200 billion in market cap. And Qualcomm’s quickly approaching that. But one of the things that, whether it’s been my conversations with Cristiano Aman or with yourself that’s really been fueling this, this isn’t just about the handsets, it’s been about these adjacent businesses that have really started to take significant portions of your overall QCT revenue. And I think in the most recent quarter, it was 38% and on a annual run rate to over 5 billion. And we’ll talk more about that later, but, just congratulations. I mean, what a tremendous outsize result.

Christian Block: Yeah, thank you very much. It was a good team of thought here. We had good talks with the customers. We were able to convince the customers. And when I joined Qualcomm, we announced that moving to Qualcomm as a business at the size of roughly 1 billion and, yes, as you say, we were able to grow it by almost five times within this timeframe. So not so bad I think, also.

Daniel Newman: Absolutely. It’s terrific. So let’s start off talking a little bit about the portfolio. You guys have made a number of announcements, portfolio expansions for the RFFE group. Why were these announcements so important for fueling this continued growth?

Christian Block: Yeah, for us, it’s very important we see moves in the frequency spectrum. We are also, in our mind, preparing what can we do beyond as our front-end for mobile. You talked about the adjacent business. So that’s very critical that we are looking what can we do to enhance our capabilities beyond what we have been doing the last four years. And one element here is clearly that we have to extend the frequency range. So we have to go, to really enjoy 5G, we have to go a little bit to lower frequencies and ensure that our technology can enable that, especially the filter technologies, or that we introduce the QSR technologies and lately, and this was announced in the last days, we also thought about, “What about the higher frequencies?”

And we have been working quite a long time on that. So it’s not that this came overnight. So it was a plan which was there two years ago when we thought what we can do here to expand our range in frequency support. And the main item was really to look into the Q-Bot technologies, which enables us that we can extend our frequencies and our filter frequencies into the area of up to seven gigahertz, gives us also the opportunity to recover the frequency range between 600 megahertz and 7.2 gigahertz, which makes practically it possible that we can really cover every application in this area, including the new coming technologies.

Daniel Newman: Yeah, I think, of course, the ability need to have that full portfolio. And that’s where I definitely want to take this conversation, Christian. Essentially, you have usurped a number of legacy names in this particular space, I guess I can as an analyst, specifically say companies like what Qorvo, Skyworks, Broadcom, that had all been sort of anointed or expected to lead, and quickly in the wireless RFFE space, Qualcomm has become number one. The fact that you have such a comprehensive solution seems to be a big driver, because this isn’t only about handsets, right? It’s about automotive, it’s about IOT. When it comes to the full, this full portfolio, what drove you guys to really think that way, to think bigger and not just get caught up in the handset space, which would’ve maybe been the easiest, and, of course, maybe what people would’ve expected from Qualcomm?

Christian Block: Yeah, we could see that in the mobile space, we could see that the end to end solution, not being only a component supplier, but really bringing system solutions for modem to antenna, that this should not end in the mobile space. So we thought about that. Can this not be applied to also other industries like automotive, as you say, or IOT, and also connectivity, where we have been moving now to the Wi-Fi 6, and so on. And what we feel is yes, as a system house, we can apply broader and we can take this end to end advantage also to other applications. And that we feel is growing also market potentially such in a way that we think continuous growth will come in the next few years, especially in these areas, but we will also see steady growth in the mobile space.

Daniel Newman: Yeah. I think you are making the right calls because I think what the overall perspective is, at one time it was the end of the PC, which isn’t actually the truth, right? We saw that in the pandemic, there was a huge momentum, and of course Qualcomm’s investing even more, but the PC’s going to become connected. And that’s been a big part of, whether it’s been the new via acquisition or how you’re that business unit, I know that’s your particular area that you think about every day, but we saw what happened during the pandemic. And then, with handsets, we’re seeing how these are more and more becoming core to our everyday livelihoods, but the world as a connected environment, whether we’re talking about the metaverse, whether, which, or whatever that ends up being called in the end, whether we’re talking about vehicles and, cause it’s not just about vehicles, it’s about the electrification, but then it’s autonomy. And then it’s connectivity to the cities, and to one another, these vehicles become kind of in themselves handsets, right? They’re just another compute, network, storage, connectivity device that’s talking to the world.

And then IOT. It can be the farm. It could be the building. It could be the manufacturing facility. It could be a retail store helping us identify what products and services we may want to consume on a whim or making sure that we’re growing enough food for your local community in a vertical farm, that’s going to come up to get food. So my point is, all this stuff comes together where what you’re building really becomes ubiquitous and critical to anything and everything that connects and anything and everything that needs intelligence. So, it seems like just a massive opportunity and that you guys are really on the right track there.

Christian Block: Yeah. It’s absolutely clear that this is a great opportunity. The good thing is we have been seeing that, especially Cristiano had the vision, shared that among all the employees, all the investors, all the customers, and yes, as you could see in the last days, the community starts to believe into that. And we really show this growth is there. We saw it was extremely difficult in the pandemic situation to get along with all the stress everyone had, but we didn’t give up. So we did the best out of this extreme time and we have been growing our technologies. We didn’t rest. And we made another move here. And with this vision going to all the new applications, we will grow further on. And especially for myself leading the RF front into, if you connect all the worlds you need, the RF front-end connection must be there.

And the target is always to have better data, best data connection in a mobile device. If you want to always look on the battery life, you want to be sure that the connection is there. And then you apply that to other devices or applications, as you say, automotive, that we have to talk vehicle to vehicle, that you have autonomous driving coming. And all these investments are really part of our strategic plan, which has been outlined by Cristiano. And this is what the whole team is following. And you will see more news coming on that, very sure.

Daniel Newman: Yeah. I’m excited to continue to hear more. I know next week, you and I both be in New York for Investor Day. So depending on the date that you heard this, that would be mid-November of 2021. I always say that because these shows are out there for a long time. So next week is middle of November 2021. Part of the reason I also think you guys have been so successful is that this is really hard. We’ve seen this with certain handset makers that maybe tried to go out on their own and quickly realized that this particular technology that you guys have become so prolific at building is complex. And that even if you can get the modem right, the radio is a whole nother challenge on a global scale. So, something to kind of just, everyone to keep in mind about what makes this not only a short term gain for Qualcomm, but it’s something that you guys are really sticky in terms of growth because of the work, the innovation and the patents, the engineering all required.

I do want to finish up by digging just a little bit into the numbers. I was doing an assessment. You heard me at the top of the show in the beginning mention, your most recent quarter puts the RFFE business at a 5 billion run rate for the next four quarters. Now, of course, there’s cyclicality, but for instance, heading into the next quarter, you’ve got new devices, super cycles. You’ve got where Qualcomm’s technology is going to be a driving force, so talk a little bit about what’s driving this business to that 5 billion mark and beyond. And do you see the holidays at all being a catalyst for another really strong quarter? Of course, your guidance overall looked very strong, but for your business.

Christian Block: Yeah, we see clearly that the mark is there. So that’s absolutely clear. And for sure, this seasonality, we don’t see that that much. So we are really having full books of orders. We do everything to support that. The good thing which helps us here is that we have been checking our capacities in advance the RF front-end. There was a lot of times in the last three quarters where we had to discuss a degree with the capacity and the supply. And we have ensuring that our front-end will be really fueled and that we can do that. And that is the fuel here. And especially then there is special events, holidays, where we see that people want to prepare for the next step and want to buy our devices. I see that coming. So I would not exclude that before Chinese New Year, we see still strong strengths here caused by these events.

But I don’t think that is only depending on these days. I think we see continuous growth and strong, fundamental growth here, especially for Qualcomm, because we have been doing this end to end. We are a system, ours can do that. And the main driver for the growth is really, truly, that the customers really recognize the value. So that was not so clear two years ago when 5G was picking up, but now everyone understands what we can really bring to the industries. And therefore, I think that’s why we have this continuous growth, which we have been sharing in our outlook last week and where we will be more going specific next week in New York.

Daniel Newman: Yeah, absolutely. And I can’t wait to get to the bottom of that. You know, as an analyst, when you make these bold predictions, like I’m making about growth and future success, it’s always good when it gets about validated. And so, I made the call early, the adjacencies were going to be critical. You were making the right bets into the right places and the company seems to be bearing fruits. Of course, things like the supply chain shortage, while clearly not hitting Qualcomm as hard as it’s hit some other companies in the industry, still shows that there’s a lot of a demand out there. And that pent up demand probably can only mean one thing for a company that’s managed their supply chain this well, is that there’s even more growth at their disposal.

Of course, you have to continue to execute, you got to continue to innovate, you got to continue to build right, because competition’s real. And of course they’re going to come after you and they’re going to try their best to disrupt. But that’s something that your organization for a long time has faced and has been able to manage very well. Christian Block, I want to thank you so much for joining me here at the Futurum Tech Webcast, congratulations on all the success of your business unit. I promise you I’ll be tracking it. We will be talking about it. And I hope for the sake of yourself, for your team and your stakeholders, that the trajectory you’re on is one that you can continue for the long run.

Christian Block: Will do. We will deliver. Thank you so much.

Daniel Newman: I’d love to have you back soon. See you in a bit, Christian.

And there you have it everybody. Really appreciate Christian Block from Qualcomm joining to talk a little bit about the RFFE business. I’ve been pretty bullish in the market, in my assessment, and with my analysis about how this business unit has been impacting the overall company and how important it’s going to be to the continued connectivity of our devices, of our things, in our communities, in our vehicles, and so much more. So there’s the inside scoop. More to come next week. Mid-November ’21, I’ll be heading to Qualcomm’s Investor Day and I will get more, and potentially be sharing more, but for this edition of the Futurum Tech Webcast, time to say goodbye. Hit that subscribe button, join us for future episodes, both interviews and thought leadership from the analyst team at Futurum Research. But for now, goodbye, see you later.

About the Author

Daniel Newman is the Principal Analyst of Futurum Research and the CEO of Broadsuite Media Group. Living his life at the intersection of people and technology, Daniel works with the world’s largest technology brands exploring Digital Transformation and how it is influencing the enterprise. Read Full Bio