Qualcomm to Debut New Mobile Chips Setting Higher Bar for Rivals

Qualcomm Inc. (QCOM) is making the biggest-ever update to its high-end Snapdragon processors, seeking to keep Intel Corp. (INTC), Mediatek Inc. and other rivals out of the market for expensive smartphones where its chips dominate.

The new products, the 808 and 810, will start appearing in phones at the beginning of 2015 and feature more advanced computing, graphics and radio capabilities, Murthy Renduchintala, a Qualcomm executive vice president, said in an phone interview.

Last year Qualcomm had 99 percent of the market for smartphone processors with integrated modems capable of accessing the fastest wireless-data networks, a dominance that let it capture 64 percent of total mobile-phone chip revenue. Competitors, seeking to make a dent in Qualcomm’s market share, are also starting to roll out their first long-term evolution, or LTE, fast-data chips.

Qualcomm’s new products are the fourth versions of LTE that the company is introducing to the market. The latest upgrade benefits from all of the trials and problem solving that have gone into getting Qualcomm’s processors into millions of phones working on different networks around the world, said Renduchintala. That’s something that the competition are now having to work through, he said.

“There are legacy issues and fixes that we have found the hard way, as we’ve deployed LTE at scale around the world,” Renduchintala said. “There’s no way Qualcomm could have landed on the solidity and performance of its fourth-generation modem without having gone through the first, second and third.”

Chip Upgrade

Qualcomm’s new processor is also aimed at providing customers with an answer to Apple Inc. (AAPL)’s latest iPhone, which contains a chip that’s capable of crunching data in 64-bit chunks, enabling software that requires more data and computing speeds. Once Google Inc.’s Android and other mobile operating systems are upgraded from 32-bit versions, there will be phones on the market capable of running the software, Renduchintala said.

While Qualcomm’s modems enabling wireless access are in the iPhone, Apple has designed its own processors. Samsung Electronics Co. (005930), the world’s largest phone maker, uses a mixture of Qualcomm’s processors and modems, as well as its own chips throughout its range.

To contact the reporter on this story: Ian King in San Francisco at ianking@bloomberg.net

To contact the editors responsible for this story: Pui-Wing Tam at ptam13@bloomberg.net Reed Stevenson, Ben Livesey

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