In case somebody here missed this, here are a few of the questions regarding Server Division answered:
What Is Qualcomm Really Doing With Its Server Division?
https://www.forbes.com/sites/patrickmoorhead/2018/07/16/what-is-qualcomm-really-doing-with-its-server-division/#65becec519ad
In other words they jumped out and acted hastily, lost all their talent and the Chinese companies they promised a deliverable to are holding them accountable to their promise. There is no business here just dreams and wishful thinking.
More people leaving the Raleigh office every Friday. Place is a ghost town. They don't have nobody to support the server product.
China JV and China cloud
So, what about the news stories about the cloud giants and Chinese customers? Do these go away? Not exactly. Qualcomm will stop directly focusing on hyperscalers and leverage its Guizhou China JV, which, theoretically, still gives it access to Chinese companies with massive scale-out datacenters like Baidu, Alibaba, and Tencent. I believe this opportunity is five to ten times bigger than the carrier edge compute and network transformation opportunity, but Qualcomm will take a back seat to its Chinese majority shareholders at the JV.
Wrapping up
I believe (not the official Qualcomm party line) that the company will still need to invest hundreds of millions in R&D into its server aspirations, otherwise, it would be hard for me to imagine success even the narrowed channel. I like that the program is focused on carrier edge compute and network transformation directly related to the 5G build out to enable software-defined low latency services. This is a much longer-term play and will take some time to play out. I do expect to see shorter-term revenue, in the next twelve months, from Qualcomm’s China JV in which it owns a 45% stake.
The competition in these focused markets is fierce from AMD, Intel, and Marvell, but Qualcomm’s new focus seems a lot more achievable to me than going head to head with Intel in all markets. To justify the continued investment, I believe Qualcomm will need to gain a sizable share in the smaller markets.
I am looking forward to seeing future progress on the strategy, particularly with the carriers.
Note: Moor Insights & Strategy writers and editors may have contributed to this article.