Forty-five dollars a share, three-point-one billion dollars, and a Wi-Fi company that most phone buyers have never heard of. That is what Qualcomm closed on this May, and it tells you more about where this company is going than any chip it has shipped this year. Atheros is now Qualcomm Atheros, and the thing Qualcomm bought is not a product so much as the entire local-radio half of your phone: Wi-Fi, Bluetooth, Ethernet, GPS, even powerline networking. Qualcomm already owned the cellular modem. Now it owns the short-range radios too. That is the moat, and it just got a lot wider.
The deal itself was announced back in January and wrapped up on the 24th of May, with Atheros folded into a wholly owned subsidiary and its former boss, Craig Barratt, running it under Steve Mollenkopf. A few weeks later, in July, Qualcomm also quietly acquired gesture-recognition assets from GestureTek. None of this is glamorous. All of it is Qualcomm doing the unsexy integration work that turns a pile of separate chips into one platform an OEM can buy off a single sales sheet. I keep coming back to this because the industry narrative is always about CPU cores and clock speeds, and Qualcomm keeps winning on the parts nobody writes headlines about.
On the chip that ships today, the relevant part is the Snapdragon S3, the dual-core follow-up to last year’s single-core S2 and its surprisingly good Adreno GPU. It runs two Scorpion cores up to 1.5 GHz, and in the hottest variants 1.7 GHz, paired with the Adreno 220 that roughly quadruples the graphics of the old Adreno 200, still on 45nm, with a 1080p-capable video pipeline and support for fat 16-megapixel sensors. It is the chip inside the HTC Sensation and the EVO 3D, and it is the part holding Qualcomm’s high-end together while the dual-core wave breaks over the whole market. Nvidia’s Tegra 2, TI’s OMAP4, and Samsung’s Exynos 4210 are all dual-core Cortex-A9 designs now, so the S3 is no longer the only game in the premium tier, as the single-core Snapdragon briefly was. It competes. It does not run away.
Here is the part that actually matters for next year, and it is not a product yet. Qualcomm has announced Krait, its next custom CPU microarchitecture, and it’s betting that designing its own cores beats licensing ARM’s reference designs, as most of its rivals do. Scorpion was always a Qualcomm-flavored take on ARM’s playbook. Krait is the swing for a clean lead: big jumps in performance per clock and, more to the point, in performance per watt, because in a phone, the watt is the whole ballgame. Apple is doing its own cores. Qualcomm is now openly doing the same. The companies that just license ARM’s latest and ship it, Samsung among them, even as it fabs Apple’s chips on 45nm, are about to find out whether that is enough. I’m still thinking it’s going the wrong way by letting ARM have the whole licensing thing. At some point, their arch will hit a wall. I would prefer full in-house architecture and a compiler compatible with ARM instructions.
What I find interesting is how lopsided Qualcomm’s position has become without most people noticing. By the count I trust, Snapdragon is sitting on roughly half of the smartphone application processor market right now. Half. And the Atheros deal is Qualcomm using that cash position to buy the one thing it did not already make in-house. When your competitor has to source a modem from you, a Wi-Fi chip from you, and increasingly a GPS and Bluetooth stack from you, the CPU benchmark is almost beside the point. This is what the 2009 decision to fold everything under the Snapdragon name was quietly building toward.
I am leaving the patent-licensing side of Qualcomm alone today because that is its own swamp, and I don’t really have access to the material to get the big picture here, and it deserves a post where I have the stomach for it. The S3 is a solid, unremarkable dual-core chip that keeps Qualcomm in the flagship conversation. The two moves around it, buying the radios and committing to a custom core, are the ones I would circle. One of them ships next year and is called Krait. The other one closed in May, which means that whatever phone you buy, a growing share of the silicon inside it now answers to San Diego.