The total SAM (Serviceable Addressable Market) Qualcomm was targeting counted on the positive acquisition of NXP was $150 billion and that has dropped now to a healthy $100 billion. Cristiano reminded us that in the last 21-month Qualcomm continued to gain new customers and grew organically. It didn’t rely on the acquisition alone, as these things are always risky. Qualcomm managed to increase its customer base from 500 customers in 2014 to 9,000 customers and 25 global distributors in 2018.
This was all organic growth and this, is as many can witness, is the best way to increase the customer base. The company showed its ability to build a sales channel, and generated a over billion in IoT alone.
Qualcomm sees potential for growth in wireless, advanced low power computing as well as artificial intelligence driven features. Of course, parts of IoT will be incorporated in 5G too. To break it down to markets the growth is seen in mobile - especially RF front end, compute, automotive, IoT and networking.
$5 billion in FY 2018 up 70 percent from FY16
Qualcomm expects $5 billion in revenues in financial year 2018, up 70 percent from financial year 2016. Cristiano mentions growth in automotive, RF front end, IoT and security, mobile computing and networking as contributing to that growth.
The NXP acquisition was one of these things that was not meant to be but, again, the merger and acquisition of such magnitude could always cause distractions. Qualcomm has been heavily distracted by the attempt for a hostile take over by Broadcom, to be later saved by the current US administration.
Since then, Qualcomm has the status of national treasure, as someone in the government office realised it would be strategically better to keep being the leader in 5G and not to allow the key technology to go to Singapore - a country traditionally close to China. Even before the Broadcom attempt, Apple decided that Qualcomm licensing fees are too high for its majesty Apple, and the Cupertino company ordered its suppliers to stop paying royalties.
Distractions are not great and the NXP merger would help Qualcomm compete better in many fields, but it would definitely take quite some time.
Cristiano expects growth in the automotive industry especially infotainment and connectivity and Qualcomm saw some significant growth in WiFi, Mesh WiFi networks, connected audio and even robotics. The company saw a very promising 2X industrial IoT growth also expected in FY 2018, compared to FY 2016.
For Qualcomm in the present and near future, FY 2019 means it has to walk the path alone, and does what it knows well, to innovate and organically grow the technology within the company.