Qualcomm Investor Day 2021 Livestream: CEO Cristiano Amon looks ahead

[Music] every generation has a defining moment a chance to make a difference this is our time we need technology to bring us together to improve the way we live our lives to enable a world where everyone and everything is intelligently connected [Music] now is the time for a new era of innovation [Music] a new mission to reinvent business to reimagine our cities to transform industries [Music] to drive the future of transportation the pace of change has never been faster and qualcomm is uniquely positioned to lead the world forward we are delivering the products and solutions to accelerate momentum and build an intelligently connected future unleashing the full potential of 5g and ai across industries to create a new era of global innovation and make the impossible inevitable so join us our mission is clear the time and the time and the time and the time is now is now is now [Music] [Applause] [Music] please welcome vice president investor relations mauricio lopez hedoyen [Music] [Applause] good morning everyone and welcome to qualcomm's 2021 investor day it's great to be back in new york and to see everyone in person before we start i'd like to thank the multiple teams that worked on today's program and our executives for their commitment to investor communications and now for some housekeeping we'll make forward-looking statements in today's program regarding our business and financial expectations and other future events i would like to refer you to our sec filings for a description of our businesses and associated risks and other important factors which could cause actual results to differ materially from those in the forward-looking statements today's agenda includes presentations by christian oman jim thompson and nikaj pakkawala and then we'll have alex rogers join the question and answer session and with that please join me in welcoming qualcomm's president and chief executive officer cristiano [Applause] [Music] [Applause] good morning everyone thank you very much for being here actually we're super excited uh you all came in person uh full house so this is make the day even more special before we start i just want to say big thank you to team qualcomm that made this happen this has been a big team effort because we have a lot to tell you this is the time of qualcomm right now and we are going to have a lot of information to give you we promise to make it all make sense but the key message you're going to see is we're truly diversifying there's so many new end markets for the company right now and the market is really moving towards our technology before i start i want to highlight a few things here's what you're going to see today number one demand for technologies continue to accelerate we are now diversified across many large addressable markets the time for qualcomm is now we have one technology roadmap that we're very proud of and that extends across every single growth opportunity we have which we can leverage we will have focused execution as you have seen for the past few quarters in financial discipline and that is going to drive a company with strong operating cash flow and consistent capital return to our shareholders today we cover our vision our strategy our incredible technology position and our financials so with that i would like to start the presentation and i want to show you that we always beat the company defining the pace of innovation in mobile you know what's for mobile but we're no longer defined but a single end market and a single customer relationship while we're always going to be the company focused and driving innovation and mobile there's more to qualcomm it is really an opportunity to connect everything that is supported by the cloud company in what we call the connected intelligent edge it's about billions of devices they're becoming smarter they're becoming connected they have efficient processing and they're enabling the cloud the company and that is no different than division we had for 5g while this is not enabled by 5g alone it is clearly how we design 5g to make sure it's the technology that connects everything to the cloud 100 of the time we are the company that will power the connected intelligent edge and this is what we would like to demonstrate that to you and help you understand what are the opportunities we have ahead so its company is really focused on this vision enabling a world when everyone and everything is intelligent connected and that's actually supported by data just want to highlight there are a number of industry predictions out there 64 of the data will be created outside the traditional data center and more data at the edge will require local intelligent processing and this is what we can do so before we get to the presentation today i know it's a busy slide but i i promise there's nothing in here that i believe you're going to disagree with me when we look of the situation today we see an incredible number of changes in the industry that are driving the need for technology so those industry trends i'm not going to be able to cover them all but it's really been a putting qualcomm at the intersection in creating demand for technology virtually across every industry accelerated digital transformation that is happening at various of every enterprise it got accelerated by the pandemic but it's not pandemic related it's about increasing the percentage of digital in the economy every single company is going to the process of becoming digital accelerating digital transformation working from anywhere working from anywhere is changing computing it's accelerating the connection between physical and digital spaces it's changing home broadband it's changing iot at the home and at the enterprise convergence of mobile npc is real this is an area of incredible excitement for qualcomm and at the end of the day connectivity advanced efficient processing in ai is really gaining scale at the edge the metaverse at different versions of what is going to be the connection between digital and physical is going to enable the next computing platform in the automotive industry it's going to an incredible pace of change where the car companies are becoming tech companies and we are well positioned at the intersection of all these trends so when we look of that it create opportunities for qualcomm across many in markets automotive which we will talk more about it and i like to point that some of you may have not seen please look at the press release we issued this morning it's very meaningful uh qualcomm has just been awarded uh the a das by bmw and we're going to talk about that during the presentation huge opportunity automotive an opportunity in the consumer the industrial enterprise and edge networking within iot that's we're going to spend most of the time during the day today identifying you know how big those opportunities are for qualcomm in our strategy to make that a reality in what is what is unique about our model is that we have one technology roadmap that is scaled to address all growth vectors and the reason is because mobile is winning our mobile heritage and dna put us an incredible position to provide high performance low power computing on-device intelligent everything wireless and the leadership across not only ai processing connectivity but camera graphics sensors will scale to support every single device at the edge from earbuds all the way to connected intelligent vehicles and that has been true as we look of the performance of the business as the diversification starts to gain scale it's a creative to margins it's changing the operating margin profile of our semiconductor business but we're just at the beginning of this incredible opportunity in the next slide exactly the most important slide if there is one thing i'd like you to take away from today's presentation and our vision for the future is we have an incredible opportunity to grow i wanted to look at this and i'll give you a notion of the past the present and the future you're looking at our business about msms we don't have the metric anymore uh msms mdms or or what some would call the fin modem in licensing and we have done well within that addressable market today our technology is driving premium and high tier android we have an incredible opportunity for growth as a result of a changing oem landscape or after an end it's one of the uh biggest success stories of a new entrant in our front end space automotive and they brought iot that creates a hundred billion addressable market opportunity for qualcomm and as we look at every single end market that we are powering and we're just at the beginning of that transition with the full dimension of with the connected intelligent edge we see the opportunity to address a 700 billion addressable market in the next decade that's one of the single expansion and create really secular growth opportunities that's why this company can no longer be defined by a single market and a single end customer and that's the most exciting uh part of where qualcomm is going and how we think about the future of this company i also wanted to highlight one other thing and hopefully this will come clear to you in this presentation there is belief in the market today in the cloud growth i think it's undisputed you just look at the evaluation of some of the hyperscalers cloud providers and there's this belief that the crowd the cloud will continue to grow exponentially just if you look at the capex projections 35 year-over-year growth if you believe in the growth of the cloud you believe in the qualcomm growth plan because the for the cloud to generate all of this data you need billions of devices to be connected to be intelligent to have contextual information and ai will get scaled at the edge so we're very aligned and you're going to see that to this presentation with the pace of this transformation and cold economy and with that i'd like to summarize it we're truly at the beginning of one of the largest opportunities in our history the industry trends are creating new vectors of growth for qualcomm and we're seeing demand for technology virtually across every industry we have one technology roadmap that is highly leveraged it's designed to scale in its driving earnings expansion for business and we're focused on customers in in markets that drive stable long-term revenues this is an example of expanding our tam and diversification while increasing margins in shareholder returns and at the end of the day in an intelligent connected edge virtually all roads virtually was put in for legal purposes virtual roads leads to qualcomm so we're very excited about our future and we have a lot to share with today when promised this is all going to make sense so now what i'd like to do is to invite on stage it's our cto but it's my friend i have been working side by side with jim for almost two decades and jim is responsible for what's the best part of qualcomm which is our technology roadmap and he's going to tell you about it so please welcome to stage dr jim thompson our cto so thank you um so i've been at qualcomm for 30 years i started when i was a youngster and um i started out on the cdma project i'm sure a lot of you are aware of what that is um ended up in qct over 20 years ago and have been the head of engineering for that for for the better part of that 20 years and so i've seen a lot of basically all of the technology development within qualcomm so my career path kind of follows almost everything that we're talking about today so i've been really lucky in that respect um i think that uh our technology roadmap is really pretty spectacular and it's it's been developed over you know a couple of decades um really from mobile and you know just going back you look at qualcomm when i started we were a mobile company and um and starting with cdma that was about voice but then we went to something called evdo which was about mobile internet and so we were very our vision was really about the mobile internet and at the time this is going back 20 years and developing these various technologies we were looking at or i should say when we were trying to drive uh mo the mobile internet we're looking at what is going to generate use cases that are interesting so we're trying to imagine what the smartphone was going to be and um so and at the time the digital cameras were kind of new so we started working on digital cameras and at the time it was simple enough that you could have two people assigned to it and you could do a digital camera same thing with graphics game boys things like that video so we started doing video audio uh mp3 players things like that so we started getting involved in all of these different things that we thought would drive data and would drive the wireless internet our intention really was or our thoughts were really about uh modems but we started doing all these technologies about 20 years ago and and so we've had this long history of developing them and and it and you end up with a um they're they're quite complex now so we have you know hundreds and even thousands of people working on some of these technologies at this point um so we're very um proud of our technology portfolio and um you know we do competitive analysis um quite often and and i in at least in my opinion there's lots of different ways you can look at these technologies but i think we have the best portfolio in the world and i think there's only a handful of companies that can compete with us um so now it's about you're looking at our future going forward and it's about extending that technology roadmap came out of mobile but extending that into um the intelligent edge and i'll give you just some examples of when cristiano talks about one technology roadmap what we really mean by that i'll start with automotive so with automotive there are cameras where there was just the bmw announcement about us winning 8s and that involves cameras so if you look at a smartphone camera it's about kind of making for example a face look good a person looked good their hair looked good i mean that's that's basically what what what it's about and the sky looks very blue and nice but um a car doesn't really care about that so much i mean you want to have some good colors so you can show things on the display but um what you care about is computer vision that can and computers don't care about what they look like it's about identifying a pedestrian very quickly so that you can make some decisions based on that so computer vision for a camera is very different than what you would do for a smartphone um other things for auto supporting multiple os's we don't do that in smartphone but all of our hardware all of our ip needs to be to be able to run multiple operating systems in in auto and other other uh areas as well maybe talk a little bit about xr and um there uh graphics plays a very very big role and for example in in whether it be vr or ar when you render something with graphics so you're you've got this very high resolution display that you you want because you want everything to look super real so the lots and lots of pixels but then you don't want to render every pixel um in the the resolution that that exists on the display what you want to do is only render those pixels that you're looking at so if you can track using a camera you can track your eye what you're looking at then you only render what's relevant and everything else is in low resolution and you can just imagine that but you're looking at me and i'm in high resolution and then if i hold my hand out there your peripheral vision can't really it the resolution by hand is probably not as high um depends on where you're sitting in the room but but that's an example of things that we do in xr so we're extending the technology in that case it's graphics we're extending it into capabilities that are relevant to xr um and then finally pc the thing i want to say about pc is that it's actually moving towards the the smartphone architecture so instead of us extending to it it's kind of coming towards us if you look at like operating systems like windows for example now they have the capability of of using accelerators and what i mean by that is that in a smartphone we put all these accelerators like video audio for example cameras that that um uh the operating system understands how to use and you can operate and it works much more efficiently like um doing a video codec for example in the cpu or the gpu is much less efficient than doing it in hardware and modern operating systems are starting to understand that they're really moving that's really what smartphones are all about the smartphone operating systems and then on top of that what we've done from from when i when you think of extending our roadmap so we believe the future of the the pc um socs are going to be a fully integrated soc so i think that that's something really important to understand and so that means you're integrating cpu gpu all of these accelerators connectivity and so forth that's all being integrated into one thing one compute platform and and so for us what that means is that we need to have a best-in-class cpu and so you're i'm sure you're aware of us acquiring nuvia and so they're designing the next generation qualcomm cpu and then of course graphics we have the ability to extend our graphics all the way up to kind of gaming class desktop gaming class graphics right now you've only seen it in in in the smartphone but you will see that in in uh pc as well so i can't talk about all of the technology i don't have enough time to all the technology we're doing but i'm going to cover a handful of areas here but but i think one of the key messages throughout this whole whole uh presentation is that we have this one technology roadmap so we've taken that mobile roadmap and we've extended it and that gives us a lot of advantage when it comes to things like time to market or just the cost of doing this ip is very expensive and the fact that we have this base already gives us a fairly big advantage so i'm going to start with ai where we are with ai okay so i'm going to claim make a claim that the gravity of ai processing is moving towards the edge so obviously cloud's super important for that but i think it's moving towards the edge now um and maybe i'll just explain that um if you look at like how you experience ai today for the most part the way you experience it is um through your experiences on google and amazon and so forth and really it's ai is used they collect data on you and then they essentially market to you whether it's a product or a website or whatever but that's really the way your experience it today but but as we go through this digital transformation where we're there are sensors that are basically measuring everything about the world whether it be a city a business your house whatever making things more efficient that's generating an incredible amount of data and and you look at like for example the most prolific sensor would be video that's obvious one that you know easy to understand and so you're generating all this data and you just cannot send the amount of data that is being generated all back to the cloud so that's number one just can't do it and so some of that has to be processed on the edge and then on top of that there are other reasons like for example privacy reliability all these things that that you probably think about when you think of ai that that so there's many many reasons why you want to keep that data whoever's generating that data will want to keep that and process it on the edge of the network versus going into the cloud um and i want to give you an example of that so this is just an example i think it's very intuitive example um and it kind of goes with our eight ass announcement this morning so we have a number of different not just bmw but other eight ask customers and if you look at the kind of data that is generated in the car it's about between our customers range from about five gigabits per second to 15 gigabits per second that is a lot of data generated okay you can't possibly send all that back imagine every single car in the road sending that data back not possible okay so there's other reasons too you don't want to wait the time that it would take to send all that data back to the cloud the cloud might be 100 milliseconds away and then it has to come back and you end up you could have moved 20 30 feet in that kind of time frame and you can't afford that kind of lag and reliability um so there's a lot so that just gives you an idea of of why that processing has to be done on the edge and then if you and one of the things i want to make clear though is that i'm not saying that there's no more cloud computing or whatever you know or ai in the uh in the cloud that's not the case at all it's just what what i mean by that is that in a system design there's going to be a lot of it that should be processed on the edge and there's going to be you know also a lot that needs to be processed in the cloud but the point here is that there are certain things that must be done on the edge of the network and that's what we're focused on okay so we've been working on ai for about 10 years more than 10 years you know initially it was a research topic for us and then it started to move into all of our technologies so if you think a lot of our technologies are signal processing based and these signal processing based technologies can be enhanced by um ai i mean camera is a great example of that and so it's really pervasive it's affected almost everything that we do we're also developing and this is pretty uh i would say a big spend for us right now or a big increase in spend for us right now is on the platform itself and um so that's when i say platform it's what our customers use to develop ai on our in our products um so what um we uh well why don't i start this this slide talks a little bit about the the base of that platform and um and how good the hardware is so this these are what you see the chart on the left is performance versus power so performance on the vertical so high is good um and and it shows us this is for smartphone compared to our next best competitor and so you can see that from uh this again this is a public benchmark that's run so we're about twice the performance and about half the power and so that's really our focus it's about um making our accelerators for ai energy efficient now so i'm feel really good about the hardware we have on top of that we have a pretty um pretty good research effort and i would say that research effort we write a lot of papers but our objective really is to capture the results of those papers in tools that our customers can use and its focus is really energy efficiency and and i'll just i won't go through all these examples just the top example there where by going from floating point computation to integer computation you can reduce the power consumption dramatically so over a order of magnitude improvements that you can make and i want to bring this up because you know we have a lot of activity here because we think that that that is really how you get power efficiency so going to the next node you know process node helps moore's law helps but really what where you're going to get orders of magnitude kind of improvement comes from algorithmic improvements and us capturing that in software that we can provide our customers so speaking of software uh software actually is the single most um area of uh highest growth i would say from a technology perspective so a lot of spend going into to software and on the edge um it's a pretty complex ecosystem a lot of different customers a lot of different requirements a lot of different models that they use a lot of different what i would call what are called operators the low-level operations of of the hardware that are required but at the core of it is something we call snapdragon um neural processor sdks software developer kit so that's really the the the core of it and then what we do for our customers is then we provide the ability to plug in for example the framework that they like to use like pie torch or or tensorflow or something like that so we have i consider it to be the best hardware the most scalable hardware going from low to high in terms of performance and then we have this software developer kit that that is quite um that's basically that's what what everyone uses and it's spending a lot of money on it and improving it every day so i'm going to move on to camera so camera is one that is super easy for everyone to understand my opinion is we're the best in the world at digital imaging um and there's a lot of ways that you can look at it measure it um and there are benchmarks like for example dxo mark is a benchmark that is used for measuring camera performance and and basically kind of the pattern here that you're seeing here is that every year we come out with our premium tier product snapdragon in mobile and then every year we have a customer i mean it looks like xiaomi is is typical xiaomi oppo but we work with a particular customer and we come out with the best camera in the world so we have that capability and then really it comes down to from a customer perspective you know uh do they choose to um you know how much effort are they willing to put into it and we work with them very closely at getting the best results from the camera and by the way this isn't just image quality that's part of it but it's also video quality there's a lot of a lot of different uh features aspects to this benchmark so i want to go to a now a video and if we could run that video that would be good there we go okay so this is an example of a video that was taken um uh with snapdragon it's an 8k uh 30 frame per second video we're the only ones in the industry that support that right now um it uses h.265 that's a number we also that it's a standard but but it's um hevc is another term that's used in the industry and it gives you about um 200 this is about 240 times compression from the actual data and it is visually lossless and then going forward we have other capabilities um what like for example we'll announce this shortly in two weeks i believe but high dynamic range and so we what what that means is we just essentially support more more bits in the pipeline which allows us to get blacker blacks and lighter lights and so it so we can make things like this you look very realistic looking and you can do even better so it just continues to improve not only that but just even from a compression point of view we're leading the standard a standard called the h.266 and uh it's called vvc and um and that'll reduce it'll increase the compression by about a factor of two so this is just an evolving technology and it keeps moving what let's oh there we go okay so um just talking about cameras and how ai intersects with cameras um so that i pulled out this one example it's very simple example and and the kind of the point i want to make is that it's not all going to be ai but ai can make your camera much better so there's a lot of conventional signal processing that you do um but but look at the picture up top and um what we can do is you take that picture and then the phone or your your device can look at that picture and determine what's what for example what is the sky and then what is the face what is the hair and for example um with uh sky you you like it to be blue right so so we can make that blue or make it bluer than it is you like a little definition in the clouds you like the skin to be smooth but you like for example the buildings in the background to be sharp and those it's all very different processing that you do but it allows us by by doing what's called semantic segmentation we can we can determine what is what and we can process everything differently in that picture to make it look the best so that that's an example of an ai feature that um that that it will become very prevalent in in smartphones um on the left there i guess that was running before i didn't watch it but but um this is a just a night shot so with the night shot of video this i guess this was a video did it was it running before i don't know if you had a chance to see it but anyways so you can see on the left is is the improved and on the right is the original and so on the left what we do is we take multiple frames and we can blend them together to get better signal to noise and then on top of that we run we have an ai algorithm that we run that you can eliminate things that are artifacts because you you know just like you know when something doesn't look right ai can know when something doesn't look look right also like um just colors like with green for example you know that the tree should be green so ai knows that too and so you can make changes to the video um on the fly and just make it look a lot better so that's just examples of how we use ai um so this is about extending our roadmap um so uh with camera you look on the left and this is about computer vision so the computer vision portion of our camera for auto for auto for adas we needed to do something that was called dense optical flow and that that's kind of confusing but but what it means is that you track the motion of every pixel so on a pixel by pixel basis you track that motion so you've got these motion vectors associated with every single pixel and that for for why you want that in automotive is so that is so that you can very quickly see a pedestrian for example and and you can identify it so you're not tracking an object you're tracking pixels so you can identify things super fast and then that in turn then can go back into our other for other like for example for xr or so that feature is not just for automotive it it flows back into our road map for everything else other obvious one is is um uh in automotive the camera can be looking straight into the sun but you still have to see that pedestrian on the side so you can't have it just wash out your camera so supporting very high dynamic range is another example and again it's just an extension of our existing roadmap if you look on the left uh or the right sorry for xr i mentioned foveated rendering and eye tracking if you can see that only the things that we're looking at are in high resolution and when we move out of high resolution you can't see it so well so and then and then that just allows us to reduce the processing that we need to do um in the uh the graphics and then on the far right that's just an example of um camera understanding what the room is so so mapping the room and then also understanding what's a surface what's a wall you know um and and in this case it's just being used for a game but that general concept is used over and over and over again um in uh in for our products okay so moving on to graphics um okay so we've been shipping graphics for about 10 years and and if you look at our mobile graphics were the best in terms of power performance so so we'll have and i think that's really a key thing especially as we move into this um the pc uh era where we scale our graphics up being power efficient and doing an integrated soc that's super important but let me go to the this chart and this chart just shows the sustained performance of our graphics and that's really what's important because for example graphics is most heavily used with uh for gaming and so in in gaming you don't play for one minute you play for you know i i guess i don't play but kids probably not many people in this room play but kids definitely play um and and it's uh you know it's 10 minutes 20 minutes or more and so it's really about sustained performance and so when you get a benchmark like our this is our nearest mobile competitor you'll get a benchmark that's really high but that benchmark doesn't mean anything the benchmark only means something if you run it over and over and over again and that's what this chart is um and so and our our graphics also scales so it scales from um supporting milliwatt kind of range um a watch a smart watch so tiny little display and then it's it will scale like i said to automotive which has some compute requirements that use the our gpu but then also to uh pcs so i just want to make it clear that our graphics will scale up to desktop class uh gaming um uh capabilities so that architecture allows us to do that um okay i'll move on to processing and really i've just got one slide here and this is uh about the purchase of nuvia and what they're working on our next generation um arm cpu and you think about that is that they and they're pretty far along at this point and we'll sample a product at uh uh i let's say nine months from now or something like that i can't remember the exact date but anyways um so we're pretty far along with uh with that development and our objective is to have the highest performing low low power cpu in the industry and and um and if you think about our overall product roadmap or i'm sorry a technology roadmap that was the one weakness that i felt that we had for quite a while and then by by acquiring nuvia we we've filled in that weakness um i'll go on to the next so connectivity so start with uh just all of the connectivity technologies that we have i consider us to be leaders in in all of them we're leaders not just in products but also in standards um so i and i wish i had more time but i see i'm running a little bit long so i'm going to go right into [Music] um 5g okay so the basis for 5g today is um is release 15. and and uh release 15 was designed to be very flexible um think of it as being forward compatible so because the whole point of 5g was to to be able to have this platform that allows us to build all sorts of capabilities on top of it so the next release that's coming out is release 16 so release 16 um our the first device that will come out will be in in december so it's maybe a month away and so most of the devices pretty much all the devices that are coming from qualcomm that are using qualcomm ships will be release 16 next year and then release 17 the standards are almost done so it's pretty much baked and that will be about two years from now so that'll be in 23 end of 23 you'll see release 17 come out and if you look at what's in release 16 and 17 there's a lot of features associated with um smartphone so so a lot of coverage enhancements mobility enhancements capacity enhancements um banned aggregation to provide for example um aggregating millimeter wave and um some sub six bands together to improve the uh call it the coverage of millimeter wave for example so there's lots and lots of features associated with smartphone in release 16 and 17 and so if you are a competitor to qualcomm you better keep up with that roadmap so very very kind of complicated dense roadmap there's also a lot of new device types that are that are coming that are being supported in release 16 and 17 so just quick examples of that would be like cv to x is so uh i should say cellular vehicle to vehicle vehicle to pedestrian vehicle to infrastructure and so so supporting that industry there's also like for example i would call it wireless ethernet is another example so very high throughput low latency high reliability kind of communications um so those are just some quick examples and then finally release 18 and beyond that's what we call um uh 5g advanced and that's where you're going to see like for example a bunch of features come out for extended reality augmented reality because it's a little different requirements than what you would use in a phone and then a lot of ai capability is going to be introduced at that point there's a lot of talk about the industry where 6g is ai well you know in reality 5g is 2 and it was built that way to be flexible and so you're going to see capabilities that come in like that we'll be introducing that will for example improve the capacity by um 60 um by just using some ai capability and determining the um the channel what are called the channel conditions to the various users in a sector so so lots of interesting stuff coming um and um maybe just talk a little bit about our capability so we are uh we are a company that supports the entire world and i think that makes us unusual when i say the entire world that the world is not all the 5g is not the same everywhere 4g is not the same everywhere there are all these different band combinations that you have to support they're different everywhere in the world so like for example um you know there are about 10 000 different band combinations that we have to design for so very so it's pretty complicated if you're you're doing that and then there's also 180 i believe that's how many we've that have launched 5g at this point but everybody's got a little bit you know different bands they've got different infrastructure providers their feature sets are different so there's a lot of idiosyncrasies associated with the band or the the the the global nature of mobile and it's something that we we do very well and then i i think it shouldn't be underestimated that we're in our uh the the value of being in our fourth generation of um of our 5g base band and it's just a lot of complexity every single generation that we come out with improves from a throughput point of view from a feature point of view and from a power point of view and in fact they're pretty dramatic improvements that you'll see that we're achieving now and you'll see in the future um okay so uh we now the way we think of modem is not just baseband or baseband and transceiver but we think a baseband all the way to the antenna and to start you need to have best in class components okay so like for example with our front end that's the the latest we've been working a lot on that and um we're actually super happy with how things are going in our front end but i i it and the set of components that we have it's like pas lna switches filters um pretty complex to kind of go well who is the best but i would say we are you know you compare us across all the different um players and and um we're um extremely competitive is the way i would describe it but then then the advantage that we have is that because we control the whole system from baseband all the way to the antenna we can optimize and there are features that we can provide that nobody else can provide and then those features end up giving us a better performance at the system level so better thermal performance better actually better throughput better power all sorts of advantages that we get out of designing it as a system and the first thing you know it's um you know i want to help you understand or make you believe that we actually from a component level we are the best and so the one area that's really easy to look at so you can kind of look at a chart and see is filters so we have the most comprehensive filter um uh portfolio and uh we released um this was um you know over a year ago we and we released something we call ultra saw saw surface acoustic acoustic wave filter and um and it's uh pretty much every single one of our customers that you that i should say um our android customers use ultra saw at this point and it is clearly the winner in terms of performance you can see the chart our next best competitor is is below us so ultra saw very very successful um this past year and then we're going to for frequencies above three gigahertz we're going to a technology called ultra ba and um that is on the right side and so ba is bulk acoustic wave filter um and you can see there on the the the chart that that's comparing us to our our next best competitor so really we that's the area that i'm actually really happy about at this point that we've closed the gap with that uh that very strong competitor um and and um and it's you look at the launches of virtually every one of our customers again if you look at this coming year they're going to be launching with ultra boss so very it's been very successful from a component point of view but i'll talk a little bit about system here but before i do um this is an example with a power amplifier so if you look at one of the things that we've done over the last number of years is we've developed our own transistor so we have our own epitaxial stack up for that transistor and um and that's got us to the point where we're very one of the best if not the best in uh pa and again it's complex how you measure it and so but what we can do is not just have a very competitive pa but we can have a much better pa because we can tie it in with the system one of the things we do is what we call dpd digital pre-distortion so we have digital pre-distortion in the baseband with the knowledge of the pa so we can do a much better job and then on top of that we use something called envelope tracking because we know exactly the signal that's going out we can always bias the the pa to be at its most efficient point and so the this chart shows 30 percent um advantage but that advantage can be even higher depending on the modulation rate so it's really uh something that's you know an advantage that we have that's pretty hard to compete with so if you look at at smartphone or i'm sorry um modem um there's i mean obviously it starts with uh with with the smartphone um but there's a lot of other areas just to give you an idea like for example in fixed wireless fixed wireless is something that is really taking off for us and for example we support eight antennas so eight dish different digital streams we also support higher power modes all that's things that were came out of the standards and standards that support other types of device types and so that's a fairly easy extension from our existing design that we have so it's not super difficult for us to do that and then on top of it there's other things i mentioned wireless ethernet for um think of the factory of the future where you're getting rid of a lot a lot of the cables so so those are examples of things that we do in for modem so i i hope that i i gave you a good feel for all these technologies and why we how we've taken the investments that we've made over the last few decades and we've extended that with understanding of all the end markets we're going into and extended all these technologies to support different um these different uh end markets and we have this one technology roadmap to do that and i think that's a big advantage that we have and that um applies perfectly to all these different end markets that that that we have that cristiano is going to talk about and i'll say one more thing and that is uh we have a very healthy patent portfolio obviously our focus um there lots and lots of uh work in 5g all the subsequent releases that i talked about there's lots of patents that are being generated associated with that and then also just our very broad um technology portfolio um it's it's the the same thing we've developed a lot of uh uh i think very important patents associated with that so so we protect ourselves and also our licensing business so and that i'd like to thank you and i guess we're going back to christiana [Music] thank you very much jim um hopefully what what you could see is we have a very unique technology roadmap pretty difficult to compete with qualcomm in connectivity because we continue to drive the roadmap forward we have everything everything wireless think about our camera in our audio you can see you can listen we can sense with rf and we have the most efficiency processing whether it's cpu gpu and ai and that's the combination that is really driving the scale of qualcomm and the growth across a number of end markets so i'm going to do in this part of the presentation i'm going to walk you to a strategy and and then provide you an ability to understand how we're executing on those new opportunities so i'm divided the presentation in four key pillars of the strategy so enhance it we're very focused on the opportunity available to us in the market right now android is one of the fastest growing revenue and margin expansion opportunity for us and handsets the second one is our rf technology across everything number three is the opportunity that we have in automotive to be the preferred partner of the auto industry and the broadest opportunity of them all is our iot you know revenue stream where it's about all of those technologies that jim outlined to you connectivity and smart processing enabling the cloud connected edge so with that let's just start focusing with handsets so our strategy can be summarized in one single statement snapdragon is the platform of choice for premium and high-tier android smartphones and we'll talk about snapdragon a little bit the the full market is changing i think people need to get up more and there is an incredible opportunity within the android space there's a change in the oem landscape there is an opportunity for android to move forward to be to becoming more premium and the snapdragon has been the undisputed leader setting the industry benchmark for premium experiences in mobile period number one in a number of different categories in doing that with all-day battery life one thing that is probably going to be new to you is the incredible effort that we have put in in such a short period of time in snapdragon marketing so the reason i said that people need to get out more 80 percent awareness in china and india about snapdragon processor it is now the number one preferred smartphone mobile processor brand and there's one thing i'd like you to look in this slide when our customers are launching their premium flagship devices and how they communicate that to their customer base there's one thing in common and a snapdragon is from you know it's display front and center about the experience the consumers will see out of the premium smartphone that's an incredible valuable asset in for qualcomm and it is incredible power in the industry today of the snapdragon brand i'm also going to use this opportunity handset to make a new disclosure we have now two year customer commitments for premium in high tier handsets across all of our main customers so xiaomi honor vivo oppo we have two-year contracts with them akasha is going to provide a little bit more detail on the financials that provide incredible predictability for hansen revenues and when we think about samsung this is a relationship that we have been expanding the upswing trajectory when we think about share we have design wings across all of 2022 for the new flagships and new form factors they are getting traction in the market qualcomm has the worldwide volume in the fold series in the flip series in a very stable position within the galaxy s series so it's really this slide is the validation that the strategy is working it's a focus on premium in high tier we're highly differentiated with snapdragon it's consumer preference and if that is providing incredible stability of our revenue uh in in the handset space and with that i'm going to talk about how we feel about the rf on end market as we entered the space we've been redefining connectivity as jim thompson outlined modem plus rf and it's not only an opportunity to generate one of the fastest growths in qct in the mobile space but also to take that across every industry this is a summary of where we are we're well positioned to be the global leader in revenue we're the number one in in the mobile industry we exceeded our 2019 analyst state target one year ahead of schedule and we've been designed across every single oem so there was a lot of skepticism about qualcomm entering this space uh as the fifth player and uh we're very proud of the execution of our team and the fact that we're winning uh with technology so this is incredible position to be in and we have opportunity to grow and that i want to give you nice an ability to understand our scale we now have performance leadership across every component jim outlined the filter with our ultra saw with ultra bar we're now defining the benchmark for performance and besides leading in performance we have now incredible scale we shipped eight billion our front end units in the fiscal 21. the smallest unit is in excess of 200 million so this it's a very good position to be in we had executed well in handset and going forward we have an incredible opportunity to grow and they're going to be three drivers of growth in addition of tracking or expansion enhancement global millimeter wave adoption millimeter wave is deployed in the united states is deployed in japan it's going to be deployed in korea and we remain optimistic with all the activity in china uh with the china unicom millimeter way for the winter olympics uh but as akash who outlined our assumptions we don't have any assumptions in a long-term model other than the millimeter wave markets that are commercial today but the reality is if millimeter way gets traction and you will get traction and we will expand that's an incredible upside opportunity for our effort and business we're also going to extend the our front end mode and plus rf into the wi-fi and we're going to attach our front end to automotive and iot so we're very proud that our front end is a success story by every metric and it's going to be continually part of the growth of qualcomm so with that i want to move away from handsets and front end and talk about automotive and the iot starting with the automotive what is unique about qualcomm is the ability to have capabilities across every single domain and a single strategy statement is we are the preferred partner for the digital chassis we have eligibility we're the number one in telematics in automotive connectivity also the number one in premium infotainment we're now working with 25 global oems the last time you heard from us was 23. we're working with 25 global oems they have select qualcomm platforms and with the acquisition of a river were very well positioned for aids and what we have been building is a solution that really meets the demand for technology as the car has been transformed you should think about the car with a completely new digital cockpit experience the demand for that is very easy to see it also points why why qualcomm has been extremely successful in building a digital cockpit users are driving looking at their phone and at the end of the day there's opportunities to bring a much more immersive experience what's relevant to you within the cockpit of the car the car is going to be connected to the cloud 100 of the time with 5g the cars connect to the cloud when they happens the car becomes a center of distribution of media gaming personalized experience a lot of data analytics and artificial intelligence new oems create a completely new business model with services and upgrades over the life cycle of the vehicle and adaf's become table stakes we built a platform for this that's what we call the snapdragon digital chassis which is a platform for the future of automotive in our in our success in a very short period of time it's not only because we have the relevant technologies that are required for this transformation but the ability to have capabilities across every single domain domain and do what qualcomm does best we build a system the digital chassis comprises of the snapdragon cockpit platform the snapdragon cloud connectivity snapdragon ride for adas and autonomy and snapdragon core to cloud services what that does it provides an opportunity for us to increase our silicon content within new vehicles by 10x and we're not doing this alone we're doing this in partnership with our customers if you look at the valuation of the auto companies right now and you look at valuation of a company like tesla it's very clear to every one of the oems that they're becoming a technology company and qualcomm become the preferred partner to help build this technology future and that's why we build this open flexible platform which is our digital chassis in partnership with our customers one of those great strategic customers and great example of bringing together digital chassis is our partnership with general motors so that the ability of creating a platform that enable not only new services and technology but makes the car an innovation a platform as a service center we're very proud of the partnership with gm and we're working with them across every single domain for connectivity cockpit to the service platform of our car to cloud service platform as well as the super cruise and i think that's just the beginning of what's happening in our partnerships with the automotive sector when you think about having all of those technologies this also has an impact outside the car when we think about the future of transportation i like to provide this example because it's easy easy to understand let's just talk about navigation today and navigation tomorrow and i think that's an example they'll tell you the difference about being a component provider versus a system provider you know all of those technologies work together so navigation today you're driving your car you're behind the wheel you look at the map in your infotainment you have the streets you have with position location your position in that street you have the direction of traffic and looking information that comes for example from google you have the ability to see green yellow red base the number of cars in the road the congestion think about the future of navigation even with the driver behind the wheel with technology such as 5g cv 2x the car is connected to every other car in the road is connected to every pedestrian to every bicycle it's connected to the traffic lights so you start to get information on how much you should adjust your speed to get a green you have information about what's happening at the intersection is there a car coming and it's supposed to be stopping and based on the rate of speed you need to get an alert the front-facing camera looking at you from the dashboard powered by the digital cockpit you will understand if you're paying attention or not based on on recent events a pedestrian moving straight into parallel to you in the sidewalk you're 45 65 miles per hour that's a safe environment if the direction speed of that pedestrian is towards the street that's not a safe environment so ability to predict use artificial intelligence and processing in the car and make sure that all those systems are integrated together is the adap system working with the digital cockpit with the cloud connectivity so that's it's what makes very the qualcomm position very unique and in addition of building you know a lot of technology into car building the future of transportation and we're very happy in how we can make this uh come to life in through the enhancement of our platform provided by the acquisition of a river qualcomm technologies plus a river allow us to have a scalable open proven platform for adas and autonomy and i'll give you a glimpse of how that's going to look like so the snapdragon right platform front in surround vision provided by qualcomm and arriver driver policy provided by qualcomm many years of research some of you have seen our cars driving around in san diego plus a river plus the oem stack uh open platform in with a broad set of partnerships for parking and driving monitoring and then multiple software uh platforms and the reason we're getting a lot of traction already and the market is really paying attention to what we can do in adas and autonomy is because in addition of having the most comprehensive platform it is open and allow the oems to also innovate it's the qualcomm horizontal business model that has proven to be very successful across all the business and what we have done in mobile and with that i'd like to show a quote from a great partner of qualcomm which is bmw it's part of the announcement we made this morning we've been awarded the next generation adas in autonomy from bmw it's going to be we're going to be helping bmw building next generation adas and autonomous driving platform and we're very excited to continue our expansion automotive with a great strategic partner such as bmw and i think that's just the beginning this is no different than what happened uh to us in telematics in in digital cockpit we have an incredible opportunity to scale very fast and which is reflected in our automotive contractive pipeline right now so with that i'm going to go from automotive to iot so i want you to remind you back to the many trends we discussed earlier and i'll pick a few conversions of mobile and pc how to build new computing devices at the edge mixed reality xr virtual reality augmented reality is the next computing platform connection of physical and digital spaces this can be as big as mobile and will enable the metaverse 5g is driving next generation infrastructure in fundamentally reshaping how we think about edge networking in the broad digital transformation of enterprises back to the message growth of the cloud is directly associated with the growth of the edge that is driving demand for our technology and that creates opportunity for us to do connectivity and smart processing across the entire cloud connected edge across consumer networking and industrial iot so as as you reflect with those trends and i just highlighted few of the trends i showed this morning there's one company that shares our vision across all of those areas and that company is microsoft and here's from few words to you from satya hello thank you so much for having me here at your invest today to talk about our deep and long-standing strategic partnership with qualcomm looking back there is no question that in the past 20 months have been a catalyst for an unprecedented wave of digital transformation that's creating important new opportunities for our customers fundamentally we are moving from a mobile and cloud era to an era of ubiquitous computing and ambient intelligence to put this in perspective by 2030 there will be 50 billion connected devices more than double the number today this means the places we go to the things we interact with will increasingly be digitized creating new opportunities and new breakthroughs from precision medicine to precision agriculture from personalized e-commerce to personalized education from connected manufacturing floors to connected homes that's why our partnership with qualcomm is so important to us qualcomm is a leader at the intelligent edge driving advances in efficient computing wireless connectivity and on-device ai and your vision for a future of technology where everyone and everything is intelligently connected is aligned with our own together we are helping our customers apply the power of our entire technology stack to meet the real world needs of today and tomorrow there's so many examples from how we have collaborated to bring arm to windows ecosystem to how we have designed silicon and systems for category creating devices like surface pro x or surface duo and hololens too uh to how we have advanced new iot platforms that bring ai to the edge and we are also working together in many areas that will be increasingly critical to our customers going forward including building the next gen 5g infrastructure and private networks this is all just the beginning and i greatly look forward to what we will accomplish together in the years ahead thank you so much [Applause] we're incredibly proud of the partnership of microsoft few companies are as strategically aligned with coconuts microsoft this is a very long term relationship for qualcomm we're really committed to their success and what is interesting is actually expand across each and every one of the opportunities we have in the connected intelligent edge so as we think about each of those opportunities and i know one of the questions is how should we think about the qualcomm iot revenue stream so i'm going to provide a summary to you as i go to each one of those opportunities iot is changing in the way to think about iot we think about iot next generation it's moving away from traditional microcontrollers with embedded software and connectivity is really about always connected if it's not connected it's not useful it's about high performance computing they can run a full operational system with very complex computational requirements in doing this with very low power it is about scaling ai at the edge with on-device intelligence our iot revenue stream in growth opportunity is divided in three categories consumer edge networking and industrial you're going to see a lot of opportunities in and they look very different but there's one thing in common so i would like to use this this time in the presentation to connect it to you where is this coming from because it's really about building on those industry trends they're moving the demand towards the qualcomm roadmap on consumer it's about the conversions of mobile whip with pc in the upcoming opportunity with the metaverse wearables is about extension of what you do with your smartphone in the devices that are around your smartphone and then consumer electronics is about going from the iot of the past into the iot of the future leveraging the technology roadmap that comes from mobile networking it builds on qualcomm connectivity dna we're not ashamed to say that we're the number one cellular and wi-fi company in the world we really understand connectivity we really understand connectivity and rf and we can take that to the other side of the link we can leverage our technology to build networking as networking has been transformed and industrial is just this very broad digital transformation which started and is going to grow significantly within the next few years so that's how we think about this iot revenue stream so i'm going to take you to each one of those and i'll tell you what's really important at the end of my presentation the first one within the consumer space is to focus on delivering next generation consumer experiences and you can easily understand what this opportunity is looking at this slide on the left you see the opportunity to expand this snapdragon platform with attached devices so for for the investment community the easy way to think of this there's an incredible opportunity in a very large very large sam created by apple for watches and airpods we're the company providing those devices for everybody else so that's the opportunity within attach wearable devices to the snapdragon platform the other one is really focus on category leading devices for the new consumer electronics that are representatives of the capabilities of the edge example this is the peloton uh plus bike the tread is the amazon astro robot here's a a quote from david limp from amazon highlighting the role of qualcomm qualcomm technologies help us realize this vision delivering world-class solutions that make us reality across multiple products this it's just the beginning of a great opportunity within the segment this is a very important partnerships expanding we're working with amazon with a number of devices on the home from the eero device to ring all the way to the astro robot and uh we're excited about what we can accomplish together that's a great example of what's happening with qualcomm in the iot consumer segment now i'd like to talk about the conversions on mobile npc this is one opportunity that we are very bullish on and we are super excited about the recent developments in the industry that is moving the architecture to a mobile architecture qualcomm is using our snapdragon platform to enable next generation laptops and you can connect to all of those trains we talk about it they work from anywhere the enterprise transformation of the home and what's happening uh with the industry i'll point to key things that defines the next generation laptop always connected enterprise anywhere that drives on-demand computing 5g on-demand computing allow if you have a workstation you have a on-demand computing that you run workloads from the cloud on your laptop and you can move whether it's in the in the work premise or from the home collaboration experiences camera audio super important in pc i bet each and every one of you number one use case on your pc right now is a collaboration too whether teams or zooms uh it took a pandemic to create a killer application of video telephony we've been trying to do that since 3g and now in every single one of the pcs the number one application is communications is even changing phone form factors as many folks are holding their phones like this to do a zoom call gaming is moving to the cloud it's it's an it's a no-brainer to a gaming developer to be able to develop a game hosted in the cloud have a compatibility with instead of multiple consoles in the desktop gaming pc have a compatibility with every single screen out there where there's a television it's a computer device where's the phone do online gaming as that happens the most important thing is do you actually have a gaming pc that allow you to have an all-day battery life it has the right connectivity for you to play games instead of thinking at separate dedicated you know gaming desktop so while gaming desktop will continue to be a market opportunity laptops can now provide that experience as companies like netflix and microsoft started to bring gaming to the cloud on device ai accelerated experience you didn't see a lot of ai processing in pcs very cpu centric architecture you see some of the announcements we made in microsoft in the qualcomm platform that's unique to the qualcomm platform the ability to you on device ai great example that is your eyes are always looking at the camera when you're doing a teams call in the ability to continue to have efficiency processing with the leading performance per uh per watt this it's an incredible opportunity for qualcomm and you should think about where we are we have the winning team we are very well positioned to be the preferred platform for pcs for the inevitable transition to arm when you think about next generation cpu is about creating the benchmark in performance for windows pcs we're going to scale our gpu to desktop-like uh or discrete graphics performance capabilities and we're going to have the most power efficient ai engine in addition or what we do in multimedia connectivity so that's another great opportunity that we have within the iot consumer and here's a quote from my dear friend panos from microsoft about the very broad partnership we have with microsoft for the transition of windows to arm in the ability to build on this incredible opportunity for the future of personal computing by the way great job from panos and microsoft on windows 11 he further validates the opportunity that we see right in front of us so now i'm going to go to the last category of iot consumer which is the next computing platform with mixed reality one thing that you're going to see in every single one of those discussions about the metaverse absolutely the majority of the devices that you see right now in virtual reality and augmented reality is powered by snapdragon we also recently announced the snapdragon spaces which is this snapdragon spaces is the xr development platform we're getting a lot of traction and we couldn't be more happy with what we have done partnering with meta on the oculus quest 2. snapdragon xr2 also named times magazine 2021 best invention for augmented reality so that has the potential to be the next computing platform and could be as big as mobiles if we're thinking about carrying ar glasses with us in addition to a smartphone and here's what i would like you to take away if you were going to spend time in the metaverse snapdragon is going to be your ticket to the metaverse the technologies that jim outlined is very difficult to do how do you connect the human uh into a virtual reality and augmented reality word and that's what we have been investing early on i remember talking about xr before it was popular a few years ago and we're very excited about our position right now and i'll point you out that this is already starting uh oculus quest 2 was 10 million units in in the success of oculus quest 2 had an impact on on the company that is providing so high performance super low power hardware and perception algorithms and software platforms are required to make this a reality and that's a role that we can play and with that create an incredible growth opportunity and here's a quote from mark zuckerberg uh the partnership that we have is very very strong it's multi-generation and we're super excited with the work that we have been doing with meta and the oculus team and i honestly believe that's just the beginning so i summarized those three opportunities now i'm going to talk about architecting the modern network iot edge networking we divide that in a couple of new opportunities that are available to us for the first time in warless we now have a technology that they can truly compete with fiber 3g 4g for home broadband wasn't an ideal technology 5g is now the fastest growing last mile broadband technology and it's really gaining scale um just to put in perspective there's now 68 5g fixed wireless access providers across 32 countries and we predict that by 2026 25 of global mobile uh uh traffic data traffic is going to be provided by 5g so this is a growth opportunity that leverages our technology it's not the same as mobile it's about creating a very reliable long range high performance and that is reflected in the design pipeline uh virtually everyone that is building on this opportunity is designing with qualcomm um that's an incredible opportunity for growth highly leveraged and we see this happening at both developing economies as well as develop economies and here's an example for you of a quote from t-mobile about our partnership t-mobile has launched 5g fixed wireless access providing now home broadband in addition to mobile and it is a very strong partnership with qualcomm and i think we're just at the beginning of this transition especially as more countries are deploying 5g bigger is going to be the addressable market for 5g wireless fiber there's also a lot of excitement on wi-fi access point what we saw happening first there was a very high demand from the enterprise transformation of the home now that demand that continues to be very high as the workplace is preparing for the future of work that includes collaboration and video we see wi-fi anywhere as not only we're connecting you know computers and phones in the home but every other device out there the mesh continue to the to evolve and be deployed everywhere the wi-fi access point is becoming a hub for iot in the room the home is not a coincidence you saw the success of the amazon acquisition of ero the evolution the access point with more technology and more value you have the opportunity to create the modern network connecting the access point directly to the cloud and you see a very vibrant technology roadmap with wi-fi 6e in wi-fi 7. with carrier upside expansion as wi-fi access point become connected to 5g wireless fiber we have 30 plus immersive home designs with wi-fi and 300 plus customers uh for enterprise grade designs with our wi-fi access point platforms and here is a testimonial for one of our great customers next year uh has been first with the majority of our technologies a very innovation focused company that is helping us commercialize next generation wi-fi access point as well as access point with 5g and then i'm going to go to the last part of the iot edge networking we don't talk much about this because we have a lot of things that we're talking about but the the seller infrastructure is changing is changing fundamentally because it's get the iran is getting virtualized many of you have heard about vran you may have not paid attention but qualcomm has been leveraging our one road map to build what's the worst best solution for the future of iran not only we have solution for uh the small cells but we have solutions for the large capacity uh radio units and we have an inline accelerator card that plugs directly into a data center what the feedback we have been receiving from the market compared to every single alternative they have is 50 percent lower total cost of ownership and 50 percent more energy efficiency which is particularly important as many other operators now have aggressive sustainability targets this is becoming a reality and i just want to show and we're very proud of showing that we had made an announcement with nec here's a testimonial from uh entity docomo japan it's one in this operator in particular is one of the most advanced most difficult to getting operators in the world in terms of the quality requirements in the future requirements that are required for 5g and we're partnered with them in nec for next generation vran architecture using the qualcomm uh platform for both the radio unit as well as the digital unit uh for vran and open ram so that's yet another growth opportunity and before i summarize it to you i want to spend some time on the broader iot industrial the transformation of industry is really tying qualcomm to the cloud we become and you saw that clearly from satya video as the cloud company and microsoft sd enterprise cloud company continues to grow with the cloud economy across a number of enterprises we become the partner of choice at the edge and it's not only unique to the cloud it's about changing all the companies with the technologies we have at the edge so i want to start listing some of the different areas i won't have time today to cover each and every one i'm going to pick one example but hopefully this example will give you an idea of what's driving a lot of the fast growth for qualcomm already significant revenues in this space an incredible opportunity as iot matures there are a number of different verticals i'll spend time today providing examples of smart cities in retail but even the verticals that we're showing you today are not all the verticals we're focused on and and we're excited because at the end of the day the market is moving towards our one technology roadmap so we're making an announcement of the smart times square experiences if i believe that the announcements going out today we're really partnered with times square uh to create a whole new uh experience for smart cities 134 million global visitors per year in this time square and we're going to help it become the epicenter of a brand new smart entertainment hub and a premium platform for some of the world's most innovative tenants state-of-the-art connectivity infrastructure with indoor and outdoor 5g and wi-fi six uh transforming visitor experiences this is a great showcase of smart cities there's a lot more happening in smart cities but we couldn't miss to show this example especially as we're here in new york and then i'm going to go to a retail retail is one that sector that is an incredible incredible transformation happening especially as we think about e-commerce you have to really re-imagine the store at the edge the retail store today has the ability to apply technology at the edge to fundamentally change the experience operations become way more efficient data available to retailers there is a number of technologies for making shelf labels digital with electronic shelf labels all the way to computer vision for inventory tracking or touchless points of sale one of the great partnerships we have is with walmart and here's a testimony provided by doug they are actively pursuing the digital transformation retail and they really see a company like qualcomm with capability across all domains as the key partner they look for walmart as they become a very advanced technology company for retail we're very proud thank you doug for the incredible partnership and that's just an example of the many opportunities we have in industrial iot so i know i spend a lot of time telling you about a lot of opportunities as a recap we talk about what we're doing in in hand system front end we have automotive we have iot consumer we have iot networking and we have iot industrial quality looks a lot we're incredibly focused because it leverages our one technology roadmap but from everything you heard today there are a number of opportunities that i would like you to take away those are some of the most significant opportunities for us in in iot if i could go back to slide i accidentally click forward all right if we can go back i'll just talk to it number one is the conversions of mobile npc that's very significant the number two opportunity is enabling the metaverse the number three is wireless fiber and then what is happening at the edge base of industry 4.0 this will create an incredible opportunity for growth beyond where we've seen today into the next decade and at the end of the day we're uniquely positioned to grow across multiple industries multiple and markets and at the end of my presentation we're truly going to enable a world when everyone and everything will be intelligent connected hopefully this was helpful i know we had a lot of information but i want you to really take away that we're we're having a 7x expansion and addressable market and we never had so many end market opportunities for qualcomm as we see today we're super excited about that and we're going to provide it to you a view and what that means financially from our cfo after the lunch break thank you very much for listening to our presentation today and we look forward to continue the conversation with you after lunch thank you at this time we'd like to invite everybody to please enjoy your lunch we'll give the room an update on when we'll begin the next session in just a few minutes enjoy your lunch [Music] my [Music] [Applause] [Music] please welcome qualcomm's chief financial officer akash paul kiwala [Applause] all right hope uh hope all of you had a great lunch or should i call it brunch we started a little early this is this is great thanks for attending the show we are so glad to be doing this in person to meet all of you after a long time and uh and also people who are online shout out to you as well thank you for joining i know there are a lot of people who are online and unfortunately everyone could not be here in person but we're super excited to be doing this so last time we did this was two years ago i had been cfo of qualcomm for two weeks so that was a little rushed so i'm just very happy that i get a redo today and so hopefully i'll do a better job today than i did then very very exciting time for qualcomm last couple years you've all been tracking us we've done great and really we all of us believe that the best is yet to come cristiano and jim talk through our technology portfolio they talk through the businesses we have our overall vision and what i'm going to try to do next is put a financial framework around all of that so let's get to it let's do this all right so through my presentation i'll talk about these four key priorities they're the same ones that i talked about two years ago and we're still very focused on all of them revenue growth diversification operating discipline and capital allocation these are all extremely important to us and as we execute going forward these are going to be front and center for us the tremendous opportunities in front of us we have the intersection of all these trends that cristiano talked through and really looking forward to take advantage of all of them but before that before we go there what i'd like to do is give a scorecard against our 2019 analyst day performance the targets we set at that point and then quickly talk through record results in fiscal 21. well it's great to see a lot of familiar faces in the audience it's uh it's great i've been seeing all of you on zoom calls and teams meetings so this is awesome all right so this is the picture of the slide that i presented two years ago and what i'm very happy to report that we have significantly exceeded these targets and what's more we did it one year in advance of when we said we'd do it so it's been been fantastic and this was across all objectives growth diversification fiscal discipline also during this time we did not sacrifice investments in technology we've continued to make investments where appropriate in select areas and a lot of what jim and cristiano laid out is a result of the investments we made today i'll lay out targets for the next three years as at the end of my presentation and through it and the key message we want to convey is we're positioned to drive diversified growth while significantly reducing reliance on any specific customer or product that's a key objective we have and you'll see that in the numbers also all right so the next three or four slides i'll quickly go through our fiscal 21 results i think they're important because they set the tone for what i'm going to say after that uh fiscal 21 a record year for us uh revenues up 55 to 34 billion dollars and we also guided 10 billion for our december quarter that's a big quarter for any chip company any fabulous chip company that you've seen really excited about the scale we bring to solving big problems operating margin nearly doubled and we more than double dps so if you think about a company at our scale growing this fast it's not every day that you see that happen and we're excited about where we are but more excited about where we are going on this slide i want to quickly talk through rf front end auto and iot in these three areas these were very small businesses for us some time ago in these three areas we had record revenues in each one of them in fiscal 21. we grew by more than 50 percent in each one in the in the fiscal year rf front end as cristiano said we're the largest player in handsets today and are positioned to keep growing beyond that in auto we have revenues of approximately 1 billion dollars in fiscal 21 and we think of this as a 10-year revenue growth run rate we're in a tremendous position based on the announcements and the technology we have and i'm going to translate that into what we think it will happen for us financially the last one is iot 5.1 billion dollars in fiscal 21. that is a if you look at our peers and the scale of iot companies that's a very large number and what's attractive is all these markets use the technology the one technology platform that we've created is used across all of these so our diversification strategy it's working if you look at what has happened over the last two years to our revenues across our front-end auto iot it's more than doubled so we went from 4.8 billion to 10.2 billion dollars over the last two years and the growth rate was 1.5 times faster than handsets which by itself was growing very strongly if you look at how much of qct revenues contributed by these businesses it's 38 percent and it used to be a lot less before and it's grown over to 38 so we're going the right direction we're achieving the objectives we wanted to achieve also this diversification is margin accretive as we talked about earlier we are reusing the r d that we have in mobile in all these areas and that makes it financially attractive to grow in these areas okay operating margin definitely my favorite chart in the last two years we've shown very strong operating margin leverage i think when we were here the last time the most number of questions i got was on this topic and uh and so it feels gratifying that we executed based on the targets much better than the targets we had set out so opex is a percent of revenue over the last two years has declined from 34 percent to 23 percent that's 11 point decline extremely extremely strong and again we were able to leverage our technology at the same time qct margins expanded by 14 points from 15 to 29 greatly surpassing the target we'd set two years ago of greater than 20 operating margins and of course the gap between the 11 decline in opex and 14 increase in ebt margins uh this was driven by improvement in our gross margin structure as well so pretty powerful margin story operating leverage story across the board as i mentioned earlier while we did this we continued to invest in the key technologies that were needed for us to have a very strong path going forward in addition and this is this is an important point that we haven't talked about before is we've continued to invest in go-to-market channels for auto and iot as we get into all these markets that's something that we needed to build and so we got some of those uh uh talent from other companies and we've built the team so that we have a go to market channel in those areas similarly we've built the organization within qualcomm focused on each of these areas so that we can have a dedicated team that's focused on executing in each one of them and also these metrics of course show the benefit of the one technology roadmap that jim and christiano discussed over the last couple years we've significantly expanded our commitment to esg as well so we announced a goal for net zero global emissions for scope one two and three to be zero by 2040 which is defined by science-based targets qualcomm's heritage is all about low power right the entire business is actually built on and jim talked about this in some detail built on technology that consumes the least amount of power that's our competitive advantage very aligned with our esg objectives in addition if you look at 5g 5g is going to drive growth across industries that really helps from an energy efficiency perspective as well so our natural our business is naturally inclined towards some of these initiatives all right so that was the past now we're going to talk about the future and what we how how we see each of our businesses play out we have a strong platform for growth i'll talk through the qct revenue streams each one of them that cristiano addressed i'll talk through stability in qtl and as cristiano said there's a tremendous expansion of our addressable market and i'll cover that in our three-year financial forecast let me start with the 5g unit forecast all right so this is going to be a very long-term driver for us i think there's a conversation about 5g being a very short-term driver and and that's a very hands-on-centric view i think if you step back and look at the various opportunities that jim and cristiano outlined this is a very long-term driver for us let me break it into two parts let me first talk about handsets and non-handsets before we look at the forecast the key premise to remember is we are the leader in 5g we invested early we accelerated 5g deployment working with our partners by one year there's a very dense roadmap we're going to keep investing and we're going to lead in 5g solutions it's a key priority for us going forward if you look at uh handsets it is playing out exactly as we had laid out two years ago so if you look at our forecast back then if you look at our forecast now uh it's playing out exactly in line and and we gave that forecast even before the initial 5g networks were deployed as you can see we're only 525 million out of 1.3 or 4 billion of handset market and there is a long way to go within handsets so within handsets we see this as a three to four year curve and we have a forecast that that you can see there in non-handsets 5g is not the same as 4g 5g was designed for low latency high data rates high security these are qualities that are required in lot of the applications that will require 5g and that is why we believe that 5g is going to have a very strong long-term growth outside handsets and you should think of this as a 10-year curve with the scale eventually being similar to handsets okay so the next three slides i'm going to talk about the handset business then go to rf front end auto and iot so in the handset business i'll start with what happened over the last year the sam over the last year expanded from 19 billion to 33 billion dollars and there were three key drivers for this first is 4g going to 5g when 4g goes to 5g a lot more content is needed and we expand the revenue we get per device second is increased capability of snapdragon chipsets as jim outlined between camera video audio gpu cpu every single vector is being pushed to the limit in terms of device performance and that benefits our asp the third driver which is the most important one for that this year is we saw sam expansion for the from the change in the oem landscape this means there was a share shift in china where our customers oppo vivo xiaomi honor they all picked up share and they became bigger and a lot of their share that they picked up was in premium and high tiers which is where qualcomm is very strong so it was a very attractive expansion of our sam the key takeaway for this page is that the sam expansion that we saw because of this is significantly larger than the modem only opportunity than the apple opportunity so it puts us in a very fortunate position as we go forward as we've said in the short term as our supply improves it the benefit of the improvement is reflected in our first quarter guidance and we expect that to benefit the rest of uh fiscal year as well okay so i think cristiano made this point briefly i wanted to reiterate it and talk about the scale of android if you look at the scale of android android accounts for 85 percent of the total in total worldwide phones sold it's a very large number 15 of course is apple 85 is android when you take that number and you convert it into addressable market for us 87 of our addressable market is android so that is why as cristiano said our primary strategy in handsets is to be the platform of choice for premium and high-tier android devices and that's where the market is as well as the sam continues to grow the ecosystem innovations in android will continue as well and that will expand our sam even when the total unit curve matures and then i'll finish with just a data point that we gave at our at our earnings as well in fiscal 21 our android revenues was 40 percent larger than our largest customer a competitor sorry with that i'm transitioning now to the forecast for handsets so over the next three years we expect a kager sam gigger of 12 in handsets this is between 20 and 20 21 and 24. uh this the drivers for this are the same as the ones you've seen before which is uh you have uh 4g to 5g and you have increased snapdragon content our forecast for revenue is that it will grow at least in line with total sam and the assumption we use for this forecast is that for apple 2023 launch our share is down to 20 percent this is the planning assumption for the forecast purposes just to be clear there is no new data point that makes us do this forecast versus our discussions in the past we just wanted to set a base for this forecast and so we've used that as a planning assumption let me step back and make sure you understand our leadership in 5g as we talk about this assumption we started early investing in 5g we are clearly the leader if you want to launch a global phone we're going to have the best modem and we're going to be significantly ahead as we go from release 16 17 18 that jim talked about so we're going to offer that product to all of our customers so you could have higher share but the forecast that i'm giving you today is based on a 20 share of iphone 2023 anything better than that would be upside if you look at just android revenue we expect that to grow significantly faster than sam and then finally the last point that christiano talked about we have commitments from our android oems right so uh oppo vivo xiaomi uh on our samsung we have commitments from them that cristiano outlined and so that gives us the confidence in the forecast we are providing today so with that i'll transition over to rf front-end rf front-end success has been tremendous for us over the last several years as you know we're at 4.2 billion dollars now for our front-end revenue and we are the largest player in handsets but we are not done we are poised for growth going forward and the reason for that is we have the broadest product portfolio and the modem to antenna development that we're going to do is going to be a competitive advantage people who only have the modem are not able to do that people who only have rf front end are not able to do that so we are going to have the best individual components and a system advantage in bringing the two together within handsets and i'll talk through growth opportunity in each of these areas within handsets there are three key drivers for growth for our front-end first one 4g to 5g transition as i mentioned earlier we are only partway through the transition there's a long way to go as that transition continues the rf front end opportunity for us continues as well second is oem landscape shift as that shift happened a larger portion of the market became available to us for our front-end solutions and then finally millimeter wave as millimeter wave gets broadly deployed we'll have an opportunity to expand our revenues as well so three very strong drivers for growth in within handsets then we'll take our rf front end products and apply it to auto and iot so we'll have an opportunity to grow in both of those areas in auto as everyone knows well all cars are getting connected 5g is going to be in all cars as that happens as 5g gets attached to all cars we will be able to add our front end to our solution the total amount of content available per car in certain cases could be as high as 30 dollars so it's a very large number and we're happy to provide a new disclosure today that our design win pipeline for rf front end and auto is already greater than 600 million going over to iot there are two inflection points for the rf front-end business in iot first is the adoption of 5g crusher talked about various places where 5g would be used in iot as 5g gets used you should assume our rf front end gets used with it second is wi-fi seven they'll be the second inflection point when wi-fi seven gets deployed late 22 early 23 we're going to make sure that our rf front 10 solution is available for wi-fi seven that just like 5g was the entry point for wi-fi seven for our rf front end wi-fi seven will be the entry point for rf front-end in wi-fi so now looking at the forward growth forecast very similar approach to handsets we see the sam growth rate consistent with handsets at 12 it's a combination of two things 4g to 5g and then auto and iot coming in as i said earlier modem to antenna we expect to have a technology advantage as we go into these markets and going forward we're forecasting similar to handsets total revenues to grow at least in line with sam and non-apple revenues to grow much faster than sam similar to uh the customer commitments we have on the chipset we also have customer commitments on our front end crestiano did not cover this um this is an update to what he said and that is reflected in our forecast that's what gives us confidence that we'll be able to achieve this plan all right so now i'll transition over to auto this is the same slide that crociano showed there is a tremendous opportunity for us to sell a system rather than individual components this is an advantage we have in mobile selling a system this is an advantage we're going to have in auto selling a system and that's a tremendous benefit when you go to a customer arriver acquisition veneer and the uh software stack part of vionir that we're going to keep is arriver that is a key part of our strategy going forward with that we're going to have an integrated software plus hardware solution for adas and that's consistent with the win we announced today with bmw so here's our forecast for auto we expect the sam to expand from 3 billion to 15 billion over the next few years the drivers are pretty simple it's digital cockpit and telematics both expanding and now we've added adas as an incremental opportunity for us if you think about adas it adas is moving towards level two plus level three as more and more vehicles go there the opportunity in adas will continue to expand and we're very excited to have just a tremendous product line that goes from the lowest end car to the highest 10 car addresses the entire spectrum so as we look at our design wind pipeline last time we gave you an update was three months ago we had 10 billion now we're at 13. so design win pipeline has expanded to 13 billion this does not include the rf front end that i mentioned on the other page 13 billion design win pipeline and from a revenue forecast perspective we expect to grow from a billion dollars in fiscal 21 to 3.5 billion dollars in two years in five years and then ten year of eight billion dollars and the reason why we have confidence in this forecast is of course our product roadmap customer relationships but over the next five years seventy percent of our revenue forecast is covered in existing design wins this is cumulative revenue over the next five years seventy percent of that is covered in existing design events also we expect several oems to make decisions on what platforms they pick over the next 24 months and we are in a great spot with the product portfolio that we have to be able to win a significant portion of it so as we look forward we're in a position to expand our design pipeline okay so next i'm going to transition over to iot cristiano talked to you through all of our iot categories so i'm not going to talk through it again but the key points i want to make on this page is we have a diversified product portfolio and revenue base total revenue of 1.5.1 billion dollars in fiscal 21 that's spread over nearly 14 000 customers the top 10 customers is 42 percent of our revenues it's a very long tail and as we get into all the areas christiana outlined the tail will get longer so this is a business that will continue to be diversified as we move forward similar to the discussion earlier we still have one technology portfolio right one technology roadmap that we're going to be using across all these opportunities so financially that's obviously very attractive to us the last last point on this slide is just revenue split across these three you should think of each one contributing a very significant portion of the revenue that adds up to the 5.1 billion and when we talk about growth rates on the next page all three of them are growing at strong rates as well so this is not a scenario where we are concentrated in one area it really is diversified across the three buckets with strong growth rates for each one of them so from a forecast perspective we see the sam in iot expanding at a keger of 17 very strong growth over the next three years this obviously is driven by digital transformation cloud computing creating a demand for our technologies connectivity low power compute and edge ai everything that cushino went through applies to this page and that's what's driving the demand for our solutions the strong momentum that we have in iot exiting fiscal 21 we expect that to continue and revenues to grow up to 9 billion by fiscal 24. this is growth faster than sam and and really this is a question of how quickly can we grow and take advantage of the opportunities in front of us as i said earlier this iot is more of a 10-year opportunity for us not not just a three-year strong growth rate all right so going over to qtl now qtl our forecast is we're going to maintain the current revenue scale and margin profile qtl is the most successful light sling business in our industry and over the last few years through litigation regulatory challenges and fpc decision that has validated our business model so that is a position of strength as we look forward within handsets greater than 90 percent of our qtl revenues come from handsapp and all the major oems are licensed for a long period of time the one key thing to note here is all oems are obligated to pay royalties independent of a chip relationship so you should think of those as distinct things going to non-handsets we have an established program in auto and iot as more and more cars get connected especially as 4g goes to 5g it's a tremendous opportunity for growth for us in iot the way we approach that market is through a module licensing program so if you're making a module we're licensing the module and that's how we get paid and again iot is a significant growth opportunity in the very long term for us all right so if you go beyond the three-year forecast i want to step back and talk through the slide that i think skip cristiano ended up skipping over and provide some financial insights on it we have opportunities for transformative growth because of the 7x dam expansion over the next decade and this goes beyond kind of the three-year forecast that we're discussing there are several of these opportunities but i want to highlight four today first is pcs as you all know well this is a very large unit and revenue pool market that exists today over 35 billion dollars in revenue available as this market transitions to arm and we have the next gen cpu developed by the nuvia team we combine that with the snapdragon technologies all the technologies that jim talked about and make it available in an integrated soc we have an opportunity to be a significant player in this market so we're excited about what it means for us in the long term second is xr as cristiano said there are more than 50 devices that have already been launched with our chipset in it we have approximately 90 share of chipset design wins so if you're convinced this is the next computing platform and the market could be very large over a period of time it's a tremendous opportunity for us there's obviously a lot of variability on how this market happens how quickly but regardless of what your view is on the scale or the pace of that change as the market grows we're going to benefit from it third is industry 4.0 because of the connectivity to the cloud as everything in various industries get gets connected this is going to play out over the next 10 years and there's tremendous opportunity for us to leverage mobile technology and sell into these markets and then finally adas i've already laid out the financial forecast for the total auto business so i won't repeat that but this is a market that is expanding very quickly with a lot of demand for technology and we like the cards we have especially with the arrival transaction and so we're positioned to benefit from it overall we're kind of at this intersection of several trends with the right technology roadmap which will help us drive long-term growth beyond three years all right so on the m a side our historical model has been very simple we buy companies and make them number one so if you look at the history and i'll pick tdk of course as an example we brought the rf front-end asset from them they were the number four number five player and now they're now we're the leader in handsets we've done that for several of these technologies as you know nuvia we just closed and we're in the process of acquiring a river and we see that fitting into the same model and then finally if you look at going forward our strategy remains unchanged we'll acquire small teams or technologies we'll acquire businesses that accelerate our internal growth strategy and large acquisitions will be opportunistic we'll look at them but we don't see it as an integral part required part of our strategy okay capital return as all of you know very well very strong capital return program over the last five years we've returned 47 billion dollars while still creeping a very strong balance sheet over the last two years we have returned 90 percent of our free cash flow our forward strategy is very consistent with what we've done over the last two years we're going to grow dividends we're going to buy anti-delete do anti-dilutive buybacks and opportunistically consider incremental buybacks we're committed to a strong balance sheet and our current debt ratings so before i conclude i wanted to summarize all the financial guidance we gave on different pages when you put it all together we have an opportunity to be a company with revenue greater than 46 billion dollars just looking at qct the guidance we gave implies mid-teens revenue kicker over the last three years with the planning assumption that our share of iphone 2023 is down at 20 percent with this assumption apple revenue as a percent of qct will be low single digits exiting fiscal 24. we're guiding qct operating margins of 30 plus i already talked through qtl very similar to what i said earlier opex is a percent of revenue we're currently at 23 percent we're guiding 21 to 23 as the range going forward so that's the summary of all of our guidance points i mean needless to say it's a tremendous growth for any company especially someone our scale we're in a very good position even with reducing reliance on a specific customer so as i conclude i want to quickly highlight some key takeaways cloud adoption is accelerating demand for intelligent connected edge that's who we are we're positioned to drive diversified revenue growth going forward one technology roadmap across all growth opportunities prioritize disciplined and focused execution and then finally drive strong free cash flow and capital returns this concludes my presentation we will now go to q a thank you [Applause] [Music] [Applause] [Music] [Music] [Applause] [Music] [Applause] [Music] [Applause] [Music] [Music] [Applause] please welcome to the stage cristiano jim akash and alex rogers president qtl and global affairs [Applause] all right hi it's tim mark curry at ubs thanks um jim you showed a slide you showed a 10x incremental opportunity per car in uh autos and i was wondering i had two questions one can you put numbers around that like what's the baseline today and you know can you give us some numbers on that and secondly um what's the sort of front-end versus back-end monetization opportunity uh is there a significant back-end monetization you know uh you know one of your peers is talking about getting half of the you know back-end monetization for over-the-air um you know downloads and i'm wondering if that's contemplated in that uh you know number as well thanks do you want to take that sure uh well so it if you really look at cars it's like phones the variance of price bands or total silicon opportunity across a low tier car versus a premium tier car there's a very large gap across but thinking of 100 bucks as an average opportunity today and some multiple of that tomorrow depending on which tier you're in is is a reasonable uh framework to think about it uh front-end was this back-end i think that's just a business model question you could monetize it multiple different ways and to me that's not really what portion of the value do you get it's just how you price it and so i think you'll see a variance across various players in the industry for that hi thanks for the presentations it's kevin cassidy from rosenblatt securities i wonder if you could give us a little more detail about the new via designers are they going to be focused just on the arm portion of the snapdragon or do they go to the gpu in the ai portions also yeah maybe i'll start that so we we having that asset uh that team is developing our next generation cpu and there is incredible scalability so our very first commercial deployment of the cpu is for our next generation pc computing part then that's going to be taken to automotive it's going to scale to the snapdragon premium you know android flagship and we're looking at the data center opportunistically we're very focused on the edge we have an asset that can go to the data center but that's more of opportunistic we're really focused on bringing that for pcs for automotive and for uh the snapdragon premium to your device thank you srini pajuri from smbc nico securities a couple of questions um great presentations by the way first on the margins akash you said your target is to maintain greater than 30 percent just wondering how you think about growth versus margins especially given your scale is there an upper limit that we should think about when it comes to your gross margins and operating margins and then i'm going to ask the second question as well sure qtl um one of the i guess struggles for us um is you know how to think about the terminal value of qtl uh obviously the duration of these contracts and duration of this ip portfolio uh is not public so if you could give us some framework about how we should think about the potential terminal value and i know you said it's going to be stable in handsets but is it sustainable longer term i guess that's a question that most investors won't understand thank you so maybe i can take the first one you want to take the second one yeah sustainability uh so on operating margins as as you can see we made tremendous progress over the last two years right we've gone from 15 to 29 um we'd set a target of 20 plus two years ago and we've beat it by a wide margin so super happy with that uh we think a prudent target to set going forward is 30 plus i mean this is a i think a reasonable way to operate the company going forward and we might have opportunities to grow go higher than that the the real question is what we're trying to contemplate in our guidance is a normalized supply chain environment as well so we think at this point this is a reasonable guidance point and then on the qtl side first starting with the commercial side of the question if you look at our contracts now we're in a cadence of about five to ten years for your typical [Music] scp agreement standard essential patent license agreement and they typically cover all three all versions of of cellular standards 3g 4g now 5g and for qtl looking forward as i said we have we have every major handset oem signed up to long-term agreements in that range that i just discussed the first renewal is not until fiscal year 24. so we have a good position on the commercial side in terms of the iep portfolio if you looked at the slide that jim presented and you look at the progression of 5g from the first release and all the kind of foundational invest in innovation in release 15 and then you look at release 16 and then on to 17 and 18. the portfolio is really foundational to everything you're seeing on that slide that was articulated qualcomm's timeline leading up to those releases in 5g is a timeline that starts 10 years earlier and so qualcomm is really positioned i think better than any company in the industry because we've continued to innovate through every successive generation and we're always focused on what's going to move the industry forward in the most effective way from a technology perspective and the standards actually benefit from the key innovations that qualcomm has driven into the standards and because we're able to scale that technology um worldwide i think as as cristiano or jim mentioned we're actually able to bring that technology into the market in a way that's successful and so that adds value to the intellectual property that's associated with all of that innovation now it's a very large portfolio and the portfolio has migrated over time to being primarily focused on cellular standard essential patents so it's very heavily weighted for what's driving the qtl uh revenue and that's the way we're planning on managing the portfolio in the business going forward thanks guys it's matt ramsey from cowan one quick clarification uh kash i think i've asked you on the last i don't know five or six earnings calls about operating margin and qct and um the progress has been remarkable you guys talked about 30 going forward as a baseline would that hold even if the apple revenue goes to single digits of qct as you've laid out yeah the the margin guidance contemplates all the other assumptions so yes okay perfect um my second question cristiano we've been over the last 10 years down this path of um windows on arm in the notebook market um i think it's crazy that every tablet i buy and put a keyboard on i can get on the internet through 4g or 5g and none of the notebooks do um so what's different this time and and could you calibrate for us a bit the the size of the or the ambition that qualcomm has in the notebook market in terms of market share or dollars or whatever metrics you want to give thank you look this is a great question thank you matt well it's um it's uh it's different it's not different than what we'd expect to happen but it's different this time because the architecture is changing if you look at some of the fastest uh you know pcs out there right now it's provided based on an arm architecture very the bringing an soc to the pc market is very disruptive if you look what apple has done with the m series on the upper hand it even has the performance of an uh an rtx 3080 discrete graphics so the transition to that architecture is happening as apple switched to arm we're seeing also the developer system switching you know you look at some of the companies like adobe and part of their software development is this arm first so that is different there's another thing that is different uh the change in productivity work from anywhere if you describe it that way it did change some of the attributes of what is the computing device that is required and accelerated what we call the mobile conversions for pc so those two things are really creating an accelerated transition to a new architecture and i would argue with probably the best position company to do this on the window side now the second part of the answer is we knew will be a road to get there so that's why we started earlier with windows on snapdragon i think that was not only work for us work for microsoft now with windows 11 microsoft has the full 32 and 64-bit you know capability on arm and in connected with the fact that we're now going to have the technologies that scale on both on the cpu and the gpu side we're actively working to build as we said uh the benchmark of performance for this new architecture of c or windows and then the answer to your question if you look at 250 million devices right now on the pc um you can model well i want to make us i don't want to make us share projections but you can model even if we get a smaller share is a significant revenue opportunity for qualcomm as you think about the the use case changing with streaming of gaming and on-demand computing i want to explain the on-demand computing i think sometimes this is not easily understood we demonstrated right at the beginning of uh 2020 an 8k video editing on adobe on a lenovo laptop connected with 5g completely transparent to you so if you have a full workstation for computer aided design veto editing you are not going to take that workstation with you when you have mobility and that is going to also pull 5g to the pc so it's an incredible opportunity for qualcomm hi uh samick from jpmorgan um thanks for taking the question just one um on the rf front end opportunity that you've talked about so i'm a bit surprised to see that you're guiding to grow in line with the sam just given the track record that you have of share gain so if you can just uh drive dig into that a bit deeper as to what are the offsets there and why shouldn't we think that's a conservative number and just in relation to rf but the non smartphone markets what are you seeing in terms of the competition or competitive landscape they're related to smartphones yeah so uh on the first one as we said uh non-apple we expect to grow significantly faster than markets so your what you said is accurate uh the offs offset is just the assumption that we're making on what share of apple we're going to have uh we as you know we participate on the r uh on the millimeter wave side uh at apple so that's that's the driver i remind me of a second question again yeah yeah so if you think about iot 5g in auto or iot right it's the same people we compete with in phones and you should think of it as just the same way we succeeded in phones will succeed in those those places so that's just extension of the 5g market from phones going into those areas and very similar landscape wi-fi today we don't compete in it and it's mostly driven by the same same competitors and as we develop wi-fi end-to-end similar to 5g that's going to create an advantage for us hi it's joe moore from morgan stanley i wanted to ask about the growth in android soc uh to the extent that you're talking about more than 12 kg for three years you know the 200 million incremental 5g units are below the premium tier i would think you're coming out of a shortage so there might be a little bit more competition and some of the huawei benefit already played out like what gives you the confidence to project that kind of growth you know that far forward yeah so as as joe as we mentioned in our presentation cushion outline we have uh two two things one is designment pipeline we have insight into what's going to happen through all of 22. second is as we mentioned we have commitments from customers that gives us confidence as well so it's really a combination of those factors and of course the roadmap's great there's all all the reason especially in china with snapdragon branding all the reason for oems to use us and supply has been the constraint that we think that opens up hi over here gary moby wells fargo securities thanks for hosting this event i wanted to ask about uh ask a question about your rff's uh success it's uh you've been a clear winner in your baseband to antenna strategy uh however i'm curious to know if you've done the analysis on on your design when traction or the revenue generated outside of your uh baseband market share footprint and uh and then i guess related to that you know and i guess you already addressed it a bit you know apple is presumably going to move to some different variety or some combination of somebody else's rf that's part of your assumption correct just clarification there thank you no thanks for the question let me address that the first one is we are winning design not only on the modem to antenna but also winning on the discrete side for example uh some of our largest customers that choose to have both uh snapdragon in their devices as well as their own silicon we're now winning our front end constant across the entire lineup of devices one of the fastest growth areas we had had over the few quarters has been the expansion of the modem to antenna into discrete having said that the the modem to antenna the system level because it saves r d because it's it's uh validated it has performance benefits it's going to continue to be decreed the key driver of growth as far as apple look i i said many times before as we continue to invest in leading our effort and technology there's opportunity to supply to apple but as we relate to apple we don't make any assumptions other than the assumptions we have in the plan and what we're doing with them in a millimeter wave so everything on apple you should think about upside i haven't find seth tiger's financial partners very great event thank you for taking my question thank you can you give me the range of functionality that you contribute to an automobile like what would be the minimum functionality and the maximum functionality and then the rent cost range and then how you integrate with like software update ability for automobiles for for the snapdragon ride for uh systems yeah i better take that one one of the uh i think differentiations uh of qualcomm snapdragon right platform that we're getting very positive feedback of oems is the ability to provide scalability we have this view that you should be thinking of adas it should be as pervasive or as abs and airbags so why not bring it to every car and we had took the same approach that we took to mobile which is creating a multi-tier platform we're doing that with adas as well with multiple skills we even i i wanted to emphasize when we talk about the whole platform having not only the snapdragon ride but the connectivity the service platform one one of the services as part of the service platform was the carda cloud is the soft sku we're getting traction which will allow oems to also upgrade from the minimum functionality to higher level functionality selling directly to the consumer and that's going to be commercialized within the coming quarters with one of our customers so the idea is to look at a multi-tier and create a business model that directly upsell functionality at the lower levels when we continue to do the full functionality for premium and high automobiles and then what would be the range in revenue to you from the minimum that let's say an oem would adopt to the maximum the range and revenue of per car we we did say the around a 10x revenue opportunity overall for the old digital chassis you know we we kind of uh uh we thought about putting a dollar amount but you know you you can think about it's you can start in the multiple hundreds of dollars and you have a significant upside opportunity at the end of the day we have a lot of silicon opportunity in the car across all of those different domains and also i'd suggest that you just look at our overall revenue forecast because i think being able to do math across tiers and asps um is a little more more difficult so if there's not a direct answer to your question but that's contemplated in the guidance we gave you then like maribera speak spoke about the um ongoing subscription service to upgrades and connectivity would you participate or do you provide a software upgrade kit to the oem and then the ongoing subscription to the end user that pays either as included in the service or as an annual or point of time subscription upgrade yes some of those capabilities for our technologies enabled by our carter cloud service platform thank you thanks uh taking a question blaine curtis barclays just want to ask on the auto side you did extend the tam out to 26 to capture 8s so just kind of curious how to think about more in line with the other segments in the three-year tam just trying to figure out how material you see 8s i think the old tam was growing at 12 you've been doing much better than that how do you think it auto for a shorter duration yeah so the the typical timeline on a design win and when a car launches is is three to four years so the way you should think about adas is really a lot of the design wins today don't necessarily hit much in the three-year forecast it's really tailwind beyond that for us or for anyone else thanks it's uh brett simpson at arite i just had a multi-part question on autos the bmw deal can you maybe just talk about the ex does that does that flow through the whole fleet of bmw is it parts of the portfolio can you just give us a sense for the scale of that agreement and when it might start to kick in um the second question on autos is really about i think in your slide deck you talked about 70 of cars will be connected by 2024. what portion would be 5g and what type of market share do you think qualcomm can attain uh within that space and another follow-up for qtl maybe i'll i'll take that yes one yes it's it's really a technology platform that's why i keep referring to the digital chassis they can be applied uh across a number of cars within uh the bmw family uh it's it's part of it's really a technology uh design win and i think to your to your question on if i understand it's a 5g market share in automotive yeah our our market share in in automotive telemedics is very very high uh right now i know and it is and i that could be a good proxy how i think about 5g one thing that we like uh about opportunities beyond handsets uh jim thompson in his presentation talk about were the one of the few companies that really enabled the globe and when you're building some of those non-cellular devices sometimes you don't really do regional skus you just have one platform and uh and you wanted to future proof that design as well because you're going to have new new frequency bands or you're going to have new versions of the standard while by the time you launch the car into production that speaks to uh our uh strength in connectivity as a result it's a good proxy that we're going to have high share when we think about 5g in automobile so essentially it's a software upgrade over the life of the car then the modem keeps improving and you get paid a follow-on for upgrading the modems that's one of the concepts it's a it's a common uh concept that you started to see and why we build accord to cloud service platform it's not only about connectivity it's also about features in the digital cockpit or even different tiers of adaes and and that's the reason i think this is actually good not only for qualcomm but also for oem partners as well and maybe just finally on qtl um you talked about the new program for autos and the iot um for for licensing i guess historically you've always been part of patent pools like the avansi patent pool and there's not a lot of revenue from those types of agreements as my understanding can you maybe just talk a little bit about you know the licensing opportunity in the car would it be similar levels to a smartphone do you think that the value you're adding is a lot higher just help us maybe with uh sizing that opportunity thanks so uh just put um avanci aside for a second so qualcomm has been licensing into independently in the automotive space for a long time i think when gm had onstar you know generations of cellular ago and so we have literally hundreds of millions of licensed connected automobiles connected units on the road um and what we've done with 5g is we went ahead and transitioned from a percentage-based royalty to a dollar based royalty so we're licensing it five dollar per connected unit or connected vehicle and we went to market with that we went public with that number but we went to market with that some years ago to make sure that we were bringing our licensing program to the market for 5g in a way that was useful for the auto oem so that they can plan their adoption of the technology in the units it's been very successful we have dozens of 5g agreements already signed up um and so we we we think that that program will be successful going forward on the iot side we've been licensing at the module level for quite some time and as akash mentioned the iot curve is a longer curve he talked about a 10-year curve so we have 3g 4g license units out there we have major mark all the major module manufacturers license and we hope to see pick up on the iot side from the qtl business is that 5g gets adopted across that curve now in the handset space obviously the 5g adoption has happened much more quickly um but we're we're looking at the iot space optimistically as well hey guys first of all thank you for an extremely informative annual stay and congratulations on the last 12 months some pretty incredible results i had two questions a lot of your growth going forward is hindered on on android you talked about a two-year sort of understanding deal contract whatever you want to call it with uh with the chinese guys and i think was samsung a part of that as well or maybe i'm mistaken and then could you talk give us some color on what that means is it is it inked is it an understanding is it a partnership and then i have a follow-up yeah so uh with the with the chinese chinese oems uh it's it's an agreement that we have in place and which gives us a high level of confidence i'll just stay at that level in terms of disclosure for samsung as we said we have high confidence in 2022 based on the design wins and conversations with them as well so that gives us confidence for the next year for for samsung follow-up quick question on the edge opportunity could you help us think about a framework for competition we typically see microcontrollers as something on the on the edge compute but we don't see a lot of companies targeting it with sort of socs that you have is that a fair statement at this point in time and if you do see somebody who is it that user i'll take the question it is a fair statement uh what is really creating demand uh for qualcomm technology it's it's really what is happening in iot as part of a much broader digital transformation that is driving a lot of grow to the cloud and it's also we have been very focused on the opportunities that require the value of high performance computing and non-device artificial intelligence what what makes qualcomm unique is we actually have every single technology in-house we control the roadmap and we have the ability to quickly scale as jim said from from watching an earbud all the way to you know a high performance computing on the trunk of a car and what is also unique about qualcomm versus other company is we have a direct relationship with the large cloud providers the hyperscalers in the large enterprises so think about qualcomm been a company that is not dealing with the traditional how will you think about the space with distributors and uh in like a catalog type business it's really about transformative you know ad solutions and that's why what you see different of qualcomm compared to some other companies is the re direct relationship as hopefully i brought some a few examples with some testimonials and quotes with some of the large enterprises and i think that what makes it very unique chris rollins susquehanna thanks so much for for hosting this day um mike my first questions for akash and cristiano maybe you can chime in here too so i just want to make sure that i understood the guidance correctly so that's better than 12 for handset and that includes the wind down of apple in that number okay so the 12 includes uh the assumption on apple great so i think that takes us to high teams then uh on that rate uh x apple for you guys and during this time 5g is maturing pricing is maturing um so i'm wondering if you can bridge us to that high teens percent is it all rfe is it that move from 4g to 5g pricing what what accelerates that bridges that that pretty big gap sure so uh overall as i said on the qct level we're seeing mid-teens is is kind of the consolidated guidance as i mentioned on my conclusion page uh there are two key key drivers within handsets first is 4g going to 5g and and as we've said in the past we typically when that happens we see a 1.5 x increase for a like to like device so you take a high tier 4g phone high tier 5g phone a 1.5 x increase in our revenue opportunity a portion of it is rfe but the rest is chipset so that's driving an increase second is there is just we're continuing to see tremendous demand from the oems to increase the capabilities on camera cpu gpu video audio uh all these all these features and that increases the snapdragon content that's available as well and then of course moore's law plays into it as we go to advanced node so it's a combination of these factors that increases our monetization for device yeah look i'd like to chime in at that question because it's exactly important i want to use this opportunity to make a clarification i think we're also making a lot of clarifications during this day how we think about growth in mobile when you look what is driving asb you know we of course i think we're highly differentiated in 5g we're you know millimeter wave it's a kid differentiation of qualcomm but even as you think of 5g it gets more mature and we continue to see the 5g plus our f on end we've been talking in the past about the 1.5 multiplier that stays in place but what's what are really driving asp is the demand for much higher artificial intelligence computing much bigger gpu much faster cpu and that's why we're bringing the next generation cpu designed by the nuvia team all the way to the mobile snapdragon and some of the new use cases we're seeing happening with 5g so it's very well balanced the other thing is uh is the consolidation of snapdragon brand as a must-have for premium android and especially as with the changing in the oem landscape that had occurred some of our traditional customers like xiaomi oppo and vivo they're climbing up to the premature and the snapdragon brand is helping them to achieve that out so globally i remind everyone to show me is now number one in europe and i think all of those things are really great contributors to the qct gross margin and growth we have time for one more question uh yeah thanks for fitting me in it's rod hall with goldman sachs i just wanted to ask two questions one back to the apple exposure akash thanks by the way for the conservative estimate on 23 just we're getting a lot of questions we continue to get a lot of questions about what the current exposure is and everybody's done their calculations we would calculate about 16 percent qct revenue exposure so qct only not the royalty part being 16 of revenues and probably and this is the tougher part around 12 of ebt so that's the calculation we do i just wanted to check with you and see if those kinds of numbers are in the ballpark yeah so i mean as you know we haven't provided a specific disclosure on what percent of our businesses them today but if you're looking at their overall scale and you're using kind of asp numbers that uh that aligns with our 1.5 x and how 4g played out that would be a reasonable way of thinking about it okay okay thanks for that and then the second thing i wanted to ask is in your i i think i'm right to say that in your iot sam you're including the compute opportunity the arm-based nuvia compute opportunity can you say when in that trajectory you might expect first revenue from those products or give us any kind of an indication of how that fits into that sam maybe what the you know proportion of the sam is if you don't want to say what the timing is yeah so uh within kind of the next three years we are including some benefit from the compute opportunity but there is no heroic assumption in the forecast we outlined and then i think on nuvia as we said we'd be sampling the parts late in 22 and commercial launches and 23. yeah but just the other thing to note is just we already have chips that still serve that market right so that is just when the cpu intersection happens but we'll we'll have products much before that i i understand we run out of time i just want to say a big thank you to all of us all of you they came in person really appreciate thank you for listening to us also the folks that follow the stream online thank you so much and we're super excited about the future of this company i think we have a great opportunity ahead and will continue to be focused in delivering return to our shareholders thank you so much [Applause] [Music] so [Music] so [Music] [Applause] [Music] you

Channel: Qualcomm

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Keywords: Qualcomm, Qualcomm Investor Day, Cristiano Amon, Analyst day, Analyst day 2021, Investor day, Investor day 2021, Investor relations, Qualcomm investor relations, Qualcomm inc investor relations, Qualcomm investor, Qualcomm investor presentation, QCOM, QCOM earnings, QCOM stock, Future of Qualcomm, Future technology predictions, Future technology, Cloud economy, Future of 5G, Qualcomm technology, Qualcomm products, IoT, Connectivity, 5G, Qualcomm Snapdragon, Snapdragon

Id: rUWPzROYn2E

Length: 175min 7sec (10507 seconds)

Published: Tue Nov 16 2021