It is clear that Qualcomm is relying on IoT to make it big. Do you think it will take off in a big way? Maybe I am wrong, but I really don't see enough people paying a premium to make mundane devices like kitchen appliances, washer\dryer, light bulbs etc smarter. Is there evidence that people are already adopting such products in large numbers? Sure, there will be some who would want to buy the latest tech gadgets out there, but I am wondering if it will ever hit critical mass
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Internet of things? I don't even own a smart phone. LOL
Ironic.
Iot will likely be a big deal but the net margins will be sub 10% atleast for hw providers. If you can provide a backend system to actually use the copious amounts of data that will be generated innovatively then you have a shot. If QC is relying on that get ready for massive cuts since that's going to be a game for lean and fast players.
100 million is a rounding error. And this is when margins are "good". When IoT buzz dies down what is the next buzziest market to chase?
"CSR made 100 million in profit last year. We're gonna need a lot more bluetooth coffee grinders to hit the market."
QC already bought CSR. CSR's bluetooth is doing pretty well because of popularity of BT speakers and headphones.
Adding it to coffee grinder is not impossible. CSR sold its BT handset business to Samsung including 300 people.
QC will certainly benefit from CSR's bluetooth (That's why QC bought it)
Just out of curiosity, does anyone watch TV anymore? I mean how many people actually sit down in their LR and watch a show that is actually being broadcast, vs. catching it on their Tivo/cable/AT&T saved programs, or their computer, or their cell phone?
Based on 5% of the end unit retail price, LTE license for a Tesla is work at least $4000. Everybody needs to pay QC if their product in any way gets data from mobile network. Now, that is what I call “Internet of Everything.”
The IOT for appliances and "toys" like watches will probably be dominated by Asian manufacturers. Think about it--you're essentially enhancing a product that already exists. The creativity is minimal; the potential for IP licensing is limited. The manufacturer who can churn out stuff for the lowest price will dominate the market. That isn't QCOM. The growth areas for IOT will most likely be robotics and biotech-related; and for applications no one has done much work in, yet. Unfortunately, QCOM is in the process of getting rid of most of its talent that could bridge the gap in these areas. It will take about 5 years for them to recover--and that's assuming they can recover.
How many Tesla's are you plannig to sell ?.... wont it is easier to create LTE hotspot ??? than pay $4000 which may not be true....great wishful thinking....
Don’t forget that a LTE connected Tesla is worth $4000 per car in license fee, more for P85.
didn't you hear? IoT is a billion dollar biz for QC. It just takes some creative classification. A car with an LTE modem is a thing connected to the internet. Boom! It's part of the internet of things. IoT is a better (buzz)word than Gobi anyway.
Anonymous104914, I would say that in general. The next stage of growth for connectivity is mostly in applications. The hardware is at a point that it's far ahead of applications, that people haven't figured out how to use it yet. So to "grow" from this point on is going to be slow relative to the potential of applications. It's not a Q specific problem. Every semiconductor company is having this problem.
Anonymous104910: Agree so nothing much in silicon for IOT, folks who can come with application and creative eco-system will be major beneficiary of IOT..
Just a buzzword to keep the stock afloat while SM and company figure out their next move.
for IOT to get enough volume,silicon need to be in cents ( compare fat cellular patent fee kudos to Altman's and other geniuses at that time to structure it that way ).IOT is different beast and Q is late in the game...currently it appears idea is to milk QTI as much as possible to support the business model and hope something else comes along during this time...management knows company's core business is saturating earlier than anticipated... past experiment to grow new biz did not pan out as expected( MFLO,QCHAT etc...) its gamble!!!
CSR made 100 million in profit last year. We're gonna need a lot more bluetooth coffee grinders to hit the market.
IOT is very low margin biz for silicon vendors..most of the value is in applications...Q just started focusing on IOT (isn't we SM saying he does not not what IOT means in all hands couple of months ago?..) ..
Anonymous104897,
There's a reason why TV's aren't talked that much wrto IOT... Broadcom's already in many of them....
Anonymous104898 Why not bid for another wifi/bluetooth solution? You can never have too much overlap...Afterall, Broadcom bought 3 LTE companies on top of building their own. And look at how well that strategy worked...Oh wait.....
just what the Q needs. A bidding war for another wifi solution.
IOT where practical. My 3 year old Panasonic TV has internet connection with support for You Tube, Netflix etc. That makes sense. But my washing machine posting to FaceBook that my boxers are particularly soiled this week, not so much.
Come to think about it more. If I were Steve, I'd be talking to Avago right now to see if they wanted to sell that portion of Broadcom's connectivity business, before someone else does. Even if Avago does keep Broadcom's connectivity, they really won't have a good platform to grow connectivity. Avago won't be happy with the margins too, and Avago doesn't really have anything else to play in the IOT space. So it's unlikely they will keep it for the long haul anyway. 10-15billion for the connectivity business wouldn't be that much for Intel, MTek, Samsung to pay.
Since IOT is mainly about connectivity (IE Bluetooth/WIFI)....The Q isn't a leader in IOT.... Broadcom is...Err. I mean Avago...
No seriously, with the exception of CSR, which has pretty fat margins in automotive and headsets, Atheros has never held the WIFI lead and Broadcom's WIFI/Bluetooth combo offering has always been regarded as a high quality product...(Their LTE chips, on the other hand, was a POS and they made a huge mistake spending billions trying to create that instead of growing their connectivity business during that time...) The only reason why the Q was in many of the cell phone offerings for connectivity was because WIFI/Bluetooth combo was often packaged for free with the LTE modem and app processor as a bundle, sometimes at a better price than the modem+app processor alone, squeezing out other connectivity players... That worked because back then, no one came close to the app processor and LTE modem. Well, that doesn't exactly work anymore now that some of the tier one went with their own app processor and LTE modem. No tier 1 OEM is ever going to pay for Q's WIFI/Bluetooth combo versus either going El Cheapo with their own homegrown version or paying for Broadcom's combo. CSR has a pretty strong portfolio in automotive and headset, where the margins are better. But for IOT, the margins aren't going to be that great. And there will be more than 1 player for that pie. I don't think the IOT profits are going to be nearly as nice as what was once available selling to cell phone tier 1 customers.
The question now is whether Avago keeps Broadcom's connectivity business or ends up selling that portion off. Avago is a chop shop and wants products that have fat margins. Connectivity does not, which is why I'm guessing Avago will keep the network chip business from Broadcom, but end up ditching the connectivity part. Might not be a bad idea to pick that up if it happens. Antitrust probably wouldn't be an issue because all that you would need to say is, look at Samsung, Intel, Huawei, MediaTek, Xiaomi. They are all building their connectivity solutions too.....
IOT will still depend on wifi or wired internet which suits every company .... qualcomm has nothing special because 3G/LTE wont be needed so it wont help qualcomm.....
I dont think profit margins will be high either because there will be cut throught competition from chinese tech companies.....
Something like chromecast .....$35 noone makes profit...
ARM just announced a new iot ref design WITH low power BT radio. Guess it just got a lot easier to make connected fridges .