Background: Qualcomm Enters the Auto Business
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 first entered the automotive segment by selling its mobile phone technology into the space, over time expanding its portfolio 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.
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.
News: Snapdragon Digital Chassis in the 2024 Cadillac Escalade IQ
The most notable early wins for the Snapdragon Digital Chassis came from Volvo and Mercedes-Benz. 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 as Cadillac announces it’s 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.
Analysis
The automotive electronics market is attractive, but 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. This looks a lot like the mobile phone market from which Qualcomm emerged.
Qualcomm’s most comparable competitor (in terms of portfolio) 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. It’s also enabling Qualcomm’s broader aspirations for the edge market.
