The PC market has evolved significantly over the years, with a handful of companies at the forefront. Chief among them is Qualcomm, which is approaching its 40th anniversary this month. Ahead of that milestone, I spoke with Alex Katouzian, a 23-year-veteran of the chip maker who currently heads the company’s mobile, compute, and XR business.
He shared insights into the company’s transformation from a phone communications firm to a leader in processors for phones, watches, IoT devices, VR headsets, and recently PCs. “Connectivity is a cornerstone of the company, but we’re also transitioning to become a compute company across many different markets,” he said.
‘We Kind of Changed the Game’
Qualcomm was founded by Irwin Jacobs and six other colleagues from a company called Linkabit. It was focused on communications, and its big innovation was developing a new way of delivering signals to phones: code division multiple access (CDMA). This produced digital voice calls that were clearer than existing analog phones, and supported a bit of data, too.
At the time, the competing “air interface” (the method of communication) was GSM, which evolved into the original 3G standard (3GPP). Qualcomm was behind a standard called 3GPP2, which used CDMA. It later created wide-band CDMA, and eventually all this merged into a standard called LTE, which evolved into 4G and then 5G.
Around that time, Qualcomm moved into the business of making chipsets for phones. “We thought we would have such a highly integrated, differentiated solution versus the verticals that existed there before,” Katouzian said, referring to when companies like Motorola, Nokia, and Ericsson had their own network software, chipsets, and made their own phones.
Alex Katouzian and Michael J. Miller (Credit: Michael J. Miller)
Qualcomm envisioned a “disruptive solution…in terms of integration and chipset value,” he said. In addition, the company took a long-term view, so instead of focusing on one or two years, it took a seven-to-10-year view. Finally, it worked with a number of partners. Katouzian says this strategy is necessary to break into an incumbent market. Qualcomm did it with wideband CDMA and Wi-Fi, and is taking the same approach now in automotive and PCs.
During the era of standard cell phones dominating the market, Qualcomm’s next significant change was separating the application processing side of the design from the modem side. “For the first time ever, those two things were actually separated physically on silicon so that it can fully dedicate one set of processors to just doing data and productivity capabilities, and the other side to just communications, and these would work in concert.”
Katouzian recalls this starting with devices running Microsoft Windows CE, where people began using productivity applications such as email on mobile devices, like BlackBerry. Then, cameras started to appear (initially just 1- and 2-megapixel cameras), followed by tiny games.
While some of this was possible with 3G and wide-band CDMA, it truly took off with 4G, where Qualcomm was first to market. “3G barely could do video conference and video teleconferencing, and now with 4G, you could go to the edge of the network with the least amount of signal and still have the ability to do all the things that you would do otherwise in a 3G network,” he said. “And so I think we kind of changed the game.”
Figuring Out the Affordability + Innovation Puzzle
The Snapdragon brand emerged around 2007 and remains Qualcomm’s flagship processor brand. Katouzian emphasized that Snapdragon is particularly crucial for premium-tier Android smartphones, such as the Samsung Galaxy S devices and those from Oppo, Vivo, Xiaomi, and Honor. “That’s where the innovation happens,” he noted.
Every year, we’ve seen significant advancements in cameras, gaming, video playback, video capture, and security within the premium tier. “There’s no other market that I know of that has a yearly cadence of such innovation coming through, then the rest of the market kind of follows,” Katouzian explained.
The phone market, with approximately 1.2 billion units sold annually, is highly competitive. Qualcomm faces challenges from other chipset makers like MediaTek and Apple, which manufactures its own processors, although it primarily uses Qualcomm modems. “If we didn’t have competitors, I think the market would be stagnant, so we look forward to actually keeping ourselves sharp and on our toes,” Katouzian remarked.
When I mentioned that innovation in smartphones seemed to be slowing, Katouzian disagreed. He observed that more people are using phone cameras instead of digital still cameras due to the sophistication of the image signal processor integrated with AI. Additionally, phones are increasingly used for gaming, and AI features are becoming more prevalent. Qualcomm is even exploring ways to partition its chipsets differently to enhance AI capabilities within phones.
“I just don’t see the innovation slowing down in mobile at all,” he asserted.
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However, Katouzian acknowledged the challenges posed by the rising costs of making new chips and adding more memory. “We have to figure out innovations that allow affordability as well as innovation simultaneously, and so that becomes a difficult situation to deal with. But all these challenges kind of bring innovation back to life,” he concluded.
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Qualcomm introduced processors for PCs around six years ago, but it’s only in the past year that significant PCs with Snapdragon chips have started to appear, and it’s a small part of the market. Katouzian reiterated that Qualcomm only enters markets where it believes it can be disruptive, will make a long-term investment, and has supportive partners.
“I think we have a disruptive solution today,” he said, noting that “the PC industry has had the least amount of innovation associated with it” because it is structured to reduce component prices each year, keeping PC prices stable. In contrast, he pointed out that handset prices have actually risen. “People actually pay for it.”
“In the PC market, all you do is push prices down, and when you push prices down, it kind of stifles innovation, and the majority of the market today belongs to one supplier,” he said.
The Snapdragon-based solution has a performance-per-watt advantage, he argues. When combined with integration from a bill-of-materials perspective, “You have all of the good traits from mobile moving into the PC—always on, always connected, light, portable, fast, long battery life. This produces the ingredients for us to put together a system solution that can be disruptive.”
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However, Katouzian acknowledged that this is a long-term play and that the first versions were essentially repurposed mobile chipsets, which had issues with software compatibility and performance. Qualcomm aims to “establish ourselves at the premium tier,” investing for the long run and working with Microsoft as a partner.
“The Copilot+ Windows 11 brand of the OS is going to first get compiled on a Snapdragon-based solution, which means everyone else has to follow what we have versus we follow what they have on every device,” he says. “Prior to that, we were third or fourth in line.”
Qualcomm is working to ensure its brand becomes well-known to consumers and enterprise workers, focusing on PCs with great performance, long battery life, better AI capability, and lightweight design. He acknowledged that there are still challenges with enterprise-based software solutions, but said Microsoft is helping Qualcomm become more compliant with these as well.
I mentioned that when the first Copilot+ PCs came out last year, the Snapdragon-based devices had more AI TOPS (trillions of operations per second) and much better battery life than competitors, but more recent machines based on the latest AMD or Intel processors have dramatically improved in both areas. But there hasn’t been a new iteration of the Snapdragon X Elite.
Qualcomm is now on a schedule to introduce new PC chips on an 18-month cadence (instead of the annual ones AMD and Intel follow) because it is focused on being ready for markets it hasn’t played in first. However, Katouzian says next-generation chipsets will be introduced at the Snapdragon Summit in late September, with products based on them starting to roll out in Q1.
Not surprisingly, he promises better performance, better performance per watt, and better AI capability. Qualcomm plans to move up in the tier of computers it makes chips for, as well as continuing to offer lower-priced options.
PCs and Modems
Finally, I asked why none of the original Snapdragon-based PCs that came out last May had integrated modems, which I found surprising given that Qualcomm is probably best known as a modem company.
Katouzian says that PC users tend to either tether to their phones or use Wi-Fi. “The ironic part is the minute you start using a cellular-based connection it’s actually so much easier and so much more secure that you kind of never want to go back because as soon as you turn it on, it’s connecting.” It’s difficult to change habits, but Qualcomm is working with the carriers on plans that will include using PC data, so they don’t require a separate subscription, as well as with OEMs because some aren’t used to incorporating cellular modems and antennas.
“Hopefully, the attach rate will start to increase,” he says.
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About Michael J. Miller
Former Editor in Chief
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