Qualcomm Technologies plays a leading role in the journey to 5G. In October 2016, the company announced the industry's first 5G modem - the Snapdragon X50 - at the Qualcomm 4G/5G Summit in Hong Kong. Qualcomm prides itself on being a wireless technology leader, which is at the very heart of its identity. The chipset maker's inventions have pushed the boundaries of wireless technology for decades. Speaking to Telecom Review, Jay Srage, president MEA and East Europe at Qualcomm, discussed the company's essential role in synchronizing the 5G and IoT ecosystem for both operators and vendors so that we may one day soon enjoy all that 5G has to offer.
Qualcomm's Q3 results show that China is a strong region for the company. Why is growth in China strong for Qualcomm and how does it compare to/impact the Middle East?
When we look at China, we see that their quick transition from 3G to 4G in the 2013-2014 period created an accelerated ecosystem around 4G devices, 4G networks and applications. This gets transferred over and impacts the Middle East by making more device options to the consumer with higher affordability. That created demand for more data on 4G networks, which in turn created new advanced technology evolution in 4G (LTE-Advanced allowing up to 1Gbps speeds on existing upgraded LTE networks). That closed the loop in terms of technology improvements, driving device costs and features, which in turn drives increased demand and consumer usage, leading to the development of the next generation 5G cycle. That loop is in the heart of Qualcomm's core values which is to create innovation that will eventually improve peoples' lives.
Qualcomm's CEO, Steve Mollenkopf, said the company remains confident that its focused investments in 5G will create a strong foundation for long-term earnings growth. Can you expand on this?
If you look at the market today, all of the players are facing the issue of being what we call "between G's". 4G was implemented in 2013-2014, while 5G is considered in the 2018-2020 timeframe. There is a large time-gap between 4G and 5G. What we have done in the past is establish a strong foundation on the development of the 3G and 4G platforms and their revenue-base. In parallel, we started building up the IoT and automotive businesses which serve as the growth platforms for the next generation mobile. In time, 5G deployment is going to continue to drive our earnings growth moving forward. We have been able to drive revenue growth on the 4G side in the first half part of the decade, from adjacent segments on top of 4G in the second half of the decade, and we expect to continue that revenue growth with 5G beyond 2020.
What can you share about Qualcomm's activities at GITEX this year, such as its collaboration with du to showcase WiGig?
WiGig is the latest WiFi technology. It is millimeter-wave multi-gigabit speed 802.11 ad WiFi. Our showcase at GITEX with du was the first in the region. This is quite advanced in terms of bringing this technology to the region because it is the first step towards 5G. Why is that? WiGig uses the same foundational technology that will be used for 5G cellular networks. Building up the expertise of how to deploy it and understanding the coverage planning and challenges will help accelerate the deployment of the 5G network in the region.
What is Qualcomm's involvement with standardization of 5G?
3GPP is the driving force behind the standardization of 5G technology. Just like we went through with 3G and 4G, the same standardization process will be applied to 5G. Our involvement is quite active, and we are working with the industry to drive the best technology forward to initiate this evolution. We want to bring the perspective of scale because now we are going to have billions of devices attached to the network. Security is a big challenge because once you have all of these devices connected, there is a higher chance of breaches, and that's where we need to make sure that the security platform is strong. All of this is the driving force behind defining what the technology can do. First we want to define the platform we want to implement and 3GPP is the best avenue to drive that standardization.
Can you share some of the breakthroughs Qualcomm has made in 5G?
When we look at the mobility side, we are striving towards the development of 5G chipsets. We have announced the Snapdragon X50, which is the first commercial 5G chipset that will be available for early commercial deployment in the mid-2018 timeframe. This will allow for the acceleration of the development of infrastructure, the ecosystem application developers and the vertical segments in terms of smart cities, allowing them to have practical testing environment of their applications and products. What we are going to bring is the platform for which they can go from simply presenting and talking about plans for 5G to an actual platform for testing and development.
What would you say are some of Qualcomm's strongest products/solutions right now?
The Snapdragon product line continues to be the core of our offerings to the industry because it has the full integration of modem capabilities, application processing and independent cores that will run imaging and videos, GPS and more. It's a platform that allows developers and device manufacturers to come up with affordable solutions for the marketplace. It also allows them to have a range of segments - going from the low-end in emerging markets like Africa or Southeast Asia, to premium developed markets like the GCC, Europe and North America.
What are the prominent barriers facing the successful rollout of 5G, and how will Qualcomm play a part in attempting to overcome these barriers through R&D?
While we are moving into the 5G evolution, it is quite different from the ecosystem around 4G. Today, 4G represents the connectivity of people to information. When you look at 5G, it will be the connectivity of people, devices and everything-to-everything. Example applications include V2X which is vehicle-to-everything communication. Vehicle-to-vehicle will prevent collisions and other safety purposes, vehicle-to-traffic lights will manage traffic; and vehicle-to-pedestrians will prevent harmful incidents. These communication platforms will require a tremendous amount of data in terms of connectivity. Other applications would be in smart grids, smart utilities and waste management. There are many vertically integrated industries that will lean towards this connectivity and that will require massive scale to be able to take on the huge number of connected devices.
Can you share some of the ways that Qualcomm is involved with smart cities, including solutions related to IoT, healthcare and automotive?
On the healthcare side, we have a dedicated business unit called Qualcomm Life that provides connected health solutions though the 2net hub. The idea is to have a gateway in your house that can connect all of the sensors and monitors that are associated with your health and regiment. This will then be connected to hospitals and doctors for continuous monitoring to take action if required. From that perspective, we continue to build relations with insurance companies, hospitals and network operators to offer these types of solutions to the marketplace.
Other areas will be driven by the 5G platform infrastructure, which will be the enabler for all of these industries to grow. The platform will, for example, drive connected automotive as well as connected healthcare under the umbrella of IoT. It will enable so many of these smart city elements. The bad news goes back to barriers, such as the need for a standardized version to bring all of these industries together on a single platform to be able to make that communication seamless.
There are various estimates of when 5G will be commercialized. When do you think it will be?
Commercial availability of 5G will likely be 2020 or earlier. Early trials and initial deployments will begin in the middle of 2018. Therefore, 5G deployments could start as early as the second half of 2018 - driving towards commercial availability for mainstream consumers around 2020. A lot of preparation is required until then and we will work diligently with our customers to achieve that goal.
When did Qualcomm begin its 5G journey?
We started to discuss 5G internally and within the industry about two years ago. 5G was more of a discussion of how it will evolve. We asked the question: what is 5G, how will it evolve and what will be the technology behind it? All of these discussions were important to gain an understanding from the beginning. There was a lot of work in determining what is feasible in terms of the building blocks and aligning the industry and global influencers and regulators which took a couple of years. We started to promote 5G heavily at the last Mobile World Congress in Barcelona, Spain, and at our last Qualcomm Hong Kong summit which we held in October. In those events, we also highlighted how we are bridging to 5G in 2018 with 4G 1Gbps class products and technologies in 2017. What started out as industry discussions two years ago has evolved into the announcement of the first commercial 5G chip.
What is the difference between 4.5G and 5G?
The significance goes beyond speed. Speed will initially go from 1 gigabit to 5.5, and then higher. But speed isn't the only factor. The difference also involves the security and scale of the network; key requirements, because today if you were to load the 4G network with the amount of devices predicted for the internet of things, it would not be able to handle that kind of data traffic. 5G will also be important for mission critical applications like robotics. We see 5G being used for doctors in one country operating on a patient using robots in another country. If there is a delay in signal transmission, you can imagine the implications. 5G's low latency will allow for successful mission critical industry robotics, and security that will allow these devices to communicate with each other - the ability for the network to hold up against this traffic intensity. 4G is more about connecting consumers to the internet at high speeds with great user experience, while 5G is about connecting the world through applications and industries - full blown IoT.
What is Qualcomm's focus for the year ahead?
You will continue to see our activities in the region with the operators, to continue to drive advanced LTE products. We want to make sure that there are devices that will take advantage of what's available on the network. The network available today is able to deliver to you up to 600 megabits, but most of the devices today don't make the most of it. We will continue to drive preparation for the build-up of 5G in time for Expo 2020. It will be critical for us to say that we have a viable 5G network available for the mass market in time for the Expo.
On the IoT side, we will continue to work with the Smart Dubai Government and develop the ecosystem to bridge the private sector with the public sector to build a consistent 5G network topology. We want to synchronize the development amongst the operators so that they have this unified ecosystem and platform.