We recently got word from some of our sources that Qualcomm has been working hard within their Automotive division, specifically within their automotive infotainment division which currently doesn't officially exist yet. If you head on over to their Qualcomm Automotive division, you can see that they state that their automotive division
is consisted of six parts. Insurance and Tracking, Fleet Management, Telematics and Emergency and last but not least Car Infotainment.
In a conference call that we had with Qualcomm's Nakual Duggal, VP of Product Development, the company was not quite ready to officially announce that they were getting into infotainment. However, he did say that the company has a long history of automotive experience with telematics and the fact that they have been and continue to be part of GM's Onstar platform. One Onstar product that Qualcomm helps GM power is their FMV rearview mirror
which just so happens to be powered by Qualcomm's Gobi modem.
During Qualcomm's UPLINQ conference, we actually got an unexpected glimpse into what we expected to see from the company and corroborated some of the rumors that we're hearing about Qualcomm's announcement at CES. What we saw were two demonstrations, one was actually a Jeep vehicle running Qualcomm's Snapdragon-based solution with a QNX implementation running atop. This Jeep had a full display dash and center console and looked very natural, however, still some things appeared fairly prototype (as they were prototypes).
Qualcomm's solution enabled a very responsive and smooth 3D mapping environment, as well as natural UIs thanks to Blackberry and many things that most infotainment systems lack today. You could also see that the Jeep featured a pair of mics right atop the infotainment system, which was designed to showcase how much better Qualcomm's infotainment system was able to recognize user voice commands. A weak suit of basically every single automotive infotainment system in the world.
After we checked out the built-in system, we also took a look at another implementation of Qualcomm's infotainment hardware. This implementation is similar to what we had described to us by our sources. A simple Android implementation sitting atop a multi-display configuration. This would mean that a single Snapdragon chip could drive the center console and two headrest displays at the same time. Enabling different content across all three screens while still delivering top-notch performance and familiar tablet-like experiences to consumers.
As you can see from the feature list, this is not your grandfather's infotainment system. It is fully packed with multiple screens, multiple apps, and runs on Android. The ability to do normal infotainment things while also being able to act as a mobile hotspot using Qualcomm's modem prowess. The addition of a camera and facial recognition could allow for interesting applications as well as the added AllJoyn features that will hopefully get trickled down from all of the mobile device developers.
While we don't expect Qualcomm to be making any announcements next week at the LA International Autoshow, it will be interesting to see what kind of a presence they will have at the Connected Car Expo
. Especially if you consider that they are already a sponsor of the event itself, along with almost every carrier under the roof (except T-Mobile).
In this picture, we are getting a demo of Qualcomm's Android-based head unit in both manufactured and after-market designs.
In the end, what this all means is that Qualcomm will be able to push themselves into a higher margin business that has much longer design cycles that could theoretically allow them to maintain more stable ASPs. If Qualcomm is able to gain a foothold in the automotive infotainment business, they could see themselves shipping millions of Snapdragon SoCs and Gobi modems at much higher margins than what they're seeing in emerging market smartphones. This would theoretically help the company balance their margin erosion after chasing for market share and revenue in emerging markets. It would also give them an opportunity to create some unique features that would make Snapdragon powered cars and phones work together better, potentially giving consumers another reason to pick a Snapdragon phone or Snapdragon car.
Qualcomm was not able to comment on the rumor, however, Qualcomm's CEO, Paul Jacobs, actually lightly alluded to this fact during their earnings call earlier this month with a statement that, "The mobile ecosystem is driving innovations in healthcare, automotive, education and of course computing, which is creating new opportunities for QUALCOMM from both a chipset and the licensing perspective."
What this means is that Qualcomm is finally getting serious about automotive infotainment, which means that Nvidia will likely have a new competitor in the space to join the ranks of Intel, Nvidia, Freescale and others. Considering the slow design cycle of the automotive industry, I wouldn't expect to hear any significant design wins for the next year or two. And even if we do, we probably won't see them implemented until the 2016 or 2017 model year anyways.
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