Making Markets EP18: Quick Take on Qualcomm’s Focus on Automotive Technology, Mobility, and Connectivity
by Daniel Newman | December 15, 2021

In this Making Markets quick take, host Daniel Newman and Qualcomm CEO Cristiano Amon talk about the company’s growth and success in automotive technology and how connecting cars to the cloud is dramatically changing the car business model.

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Daniel Newman: I want to talk about automotive for a minute. Okay. That’s the smallest in terms of actual revenue now, but you heard me mention that pipeline, I think $13 billion or so was what was reported most recently.

And the reason I want to mention this is you talk about a secular trend that the investor community, retail, and institutions are getting behind. You’ve seen the valuation of Tesla. You’ve seen the valuation of Lucid come up. Most recently, Rivian becoming worth more than GM. And this is momentarily, all on the speculation of what the future of connectivity looks like. It’s not about cars. It’s about mobility, connectivity, technology. And these companies are seen as the future. How does Qualcomm not become one of the first names that people are going to think about when they’re figuring out how to invest in the technology that’s going to be the underpinnings of that?

Cristiano Amon: It’s inevitable and I’ll tell you the reason why. And why, two things. Why we’re super excited about this and why we’re becoming successful in a very short period of time. So the car is being completely transformed. The car is becoming a connected computer on wheels. If you look of the valuation of companies like Tesla, and you put in contrast with all of the other car companies, what you realize is they’re valuing it because Tesla is a technology company is making the car a platform for innovation, a platform for service distribution. In addition to taking you anywhere you want it. When you connect the car to the cloud, you change the car business model forever. Your car can distribute media, can distribute games, can provide insights for you as a driver and have a personalized experience for you.

You can have advertisement if you are a ride share. You can have the car inserted into the enterprise that it belongs to, connected all the way to the enterprise management systems. And you can even see a future that some of the car companies will make more money on this service revenue of the car than the profit of selling the car in the first place. It changes everything. But the other thing that’s happening is autonomy assisted driving is going to be as pervasive even if the driver’s behind the wheel. People talk about, “Let’s go do level five. Let’s go do level four.” But at the end of the day, there’s a big market for you who is still behind the wheel and the car will drive itself in the highway. Or the car will drive itself in the town, and you’re going to have this ADAS. It’s going to be as pervasive as airbags, ABS, seat belts.

Then the other thing that happens, you connect a car to what is now intelligent transportation. This is not about a company thinking about, can I sell a component to the car? No. Can we look at the whole transportation and take an approach like system, like we do for example, with seller? Let’s connect the car to the pedestrian, the car to the bike, the car to the traffic lights with technology like C-V2X. All of a sudden you have a matrix and you’re now managing intelligent transportation, and the car now is part of a network. This is all of those technologies. We’re the only company, when you look at everybody else that has the technology to help the car companies become tech companies, it’s Qualcomm. And we actually have a horizontal model.

We’re open, all of the platforms we provide. The car companies can innovate. So as a result, here’s what we did. We looked at the traditional automotive suppliers and they’ll have a component. Somebody will design a car and they’ll say, “I wanted to add this capability to the car. Can you please provide a component?” But when you look at how the car company’s thinking about the car, they think, okay, the drive train, I’m going to have a platform. The drive chain, I’m going to put across different cars. I’m going to build the chassis. I’m going to put different cars. I’m going to have a unibody. So we took a different approach. You are going to be a technology company. We’re going to build a digital chassis that is going to have all of the elements that you need.

You’re going to have the high performance computation for on-device AI, and all the decisions you have to do in the car in real time. And guess what? You cannot put a server in a trunk of a car. You will consume the power that you need for your range. So you have to have efficient computing coming from the mobile heritage. Connect the car to the cloud, build the service platform, and provide all of the ability to connect all of this information from the network in the car and build the most competitive and open ADAS. And that’s what we’re doing. And that’s the reason I think it’s one of the fastest growing, I think, pipelines for Qualcomm.

Daniel Newman: Yeah, it’s kind of hard not to feel your excitement when you’re talking. You’re just like, “Go!” I get it.

About the Author

Daniel Newman is the Chief Analyst of Futurum Research and the CEO of The Futurum 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