It’s no surprise that Qualcomm is emerging as a dominant player in the automotive electronics space. Founded to deliver quality communication to the mobile edge, Qualcomm found great success in bringing connectivity, and capability, to increasingly intelligent mobile devices. For a long time, that device was your phone. That’s changing; your car is your ultimate connected device.
Qualcomm Enters the Auto Business
Assisted driving (delivered by an advanced driver-assistance system, or ADAS), the digital cockpit experience, and even cloud connectivity, are all central to a driver’s experience. These features are also all enabled by sophisticated electronic systems that make the modern automobile look closer to a rolling data center than any traditional notion of a “car.” There’s an arms race in the automotive electronics space, with a handful of forward-looking technology companies chasing a market expected to be worth an estimated $100B by 2023.
Qualcomm entered the automotive segment by selling its mobile phone technology into the space. Modems presented a natural expansion into a directly adjacent market. Over time, Qualcomm expanded its offerings into a full range of automotive solutions, including ADAS, with its acquisition of Arriver as part of its Veoneer acquisition.
Qualcomm’s investments in automotive are paying off. In its latest earnings call, CEO Cristiano Amon told us that the company had grown its automotive revenues by “double digits” year-over-year. In its recent earnings release, Qualcomm reported revenue for its automotive products of $434M. That’s up 13% year-over-year.
There’s more revenue to follow. Last September, Qualcomm told investors at its Automotive Investor Day that its design win pipeline is expected to deliver $30B back to the company. That was nearly a year ago; the pipeline has undoubtedly grown.
The Snapdragon Digital Chassis
The Snapdragon Digital Chassis is Qualcomm’s umbrella set of solutions for the connected car. The portfolio covers four essential elements:
- Snapdragon Auto Connectivity is a comprehensive portfolio of 4G/5G, Wi-Fi, Bluetooth, and positioning solutions.
- Snapdragon Car-to-Cloud provides a software suite of integrated, flexible services allowing automakers to provide over-the-air telemetry and related features.
- Snapdragon Cockpit powers the driver-facing experience, enabling a software-defined in-cabin experience with a range of hardware and software options.
- Snapdragon Ride: a scalable solution stack customizable by auto OEMs to provide automated driving capabilities ranging from basic AI inference and vision processing to full-stack autonomous driving.
Given the highly specialized nature of the space, automotive is a market requiring deep partnerships with customers and others in the ecosystem. This is also true of the mobile phone business. Qualcomm has spent its entire existence enabling, and being enabled by, others in its industry. The company continues to build on that strength as it grows in the automotive sector.
Qualcomm’s list of partners is expansive. It includes deep collaboration with the automakers, such as its long-term strategic relationship with BMW to co-develop ADAS systems. Qualcomm also forged relationships with long-term auto subsystem suppliers like Bosch, Valeo, and Samsung. Most interestingly, the company is also forging relationships with next-generation solution providers, such as Spoke, which has a platform to improve the safety of non-car-riding commuters using connected vehicle technology.
This leads to the Snapdragon Digital Chassis becoming very attractive to automakers, leading to some of that $30B design-win pipeline about to start paying off.
Snapdragon Digital Chassis in the 2024 Cadillac Escalade IQ
The most notable early win for the Snapdragon Digital Chassis came from Volvo and Mercedes-Benze. Qualcomm and Volvo jointly announced that the Volvo EX90 and EX 90 Excellence electric SUVs are built using Snapdragon Digital Cockpit technology. It’s an excellent solution, providing a fully-connected multi-screen experience. Mercedes and Qualcomm are collaborating on a digital cockpit solution that will be deployed in a future Mercedes model.
This month, the momentum continues with an announcement that Cadillac is putting Snapdragon Digital Chassis technology into its upcoming 2025 Cadillac Escalade IQ, Cadillac’s first all-electric full-size SUV. The design win includes more than just Snapdragon Digital Cockpit. The new vehicle will consist of Snapdragon Auto Connectivity and Snapdragon Ride. It’s a nice win for Qualcomm.
Analyst’s Take
The automotive electronics market is attractive, but it’s not an easy one to enter. A technology vendor must understand how to deliver compute and communication solutions to an AI-enabled mobile edge. The market requires strong partnership skills, as collaboration across a broad ecosystem of enabling technologies is how platforms are built in this market. All of this is familiar to Qualcomm.
Qualcomm’s most comparable competitor in the lucrative ADAS and digital cockpit market is NVIDIA, which is also aggressively growing its automotive business with its NVIDIA DRIVE platform. NVIDIA reported in its latest earnings call that its revenue in the segment was up an incredible 114% year-over-year, coming in at $296M for the quarter (Qualcomm’s automotive revenue was $434M for the same period). NVIDIA reported that its design-win pipeline stands at $14B.
NVIDIA isn’t Qualcomm’s only competitor. Over a dozen different vendors are competing directly against the various elements of the Snapdragon Digital Chassis. It’s a challenging market to navigate, but Qualcomm is navigating better than most.
Qualcomm’s growing success in automotive is just one example of how well the company is executing its strategy to define the mobile edge. Whether radio, compute, AI, or even cloud, Qualcomm delivers a solution stack that no other technology company today can provide. That’s a powerful position. It’s winning Qualcomm business in automotive. The broader edge is next.
Disclosure: Steve McDowell is an industry analyst, and NAND Research an industry analyst firm, that engages in, or has engaged in, research, analysis, and advisory services with many technology companies, which may include those mentioned in this article. Mr. McDowell does not hold any equity positions with any company mentioned in this article.
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