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Qualcomm Sales

To accelerate digital transformation and drive revenue growth through innovative connectivity solutions by becoming the undisputed global leader in wireless technology

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To accelerate digital transformation and drive revenue growth through innovative connectivity solutions by becoming the undisputed global leader in wireless technology

Strengths

  • PATENTS: Industry-leading portfolio of 140,000+ patents providing stable recurring licensing revenue streams and strong competitive moat in 5G and beyond
  • DIVERSIFICATION: Strategic expansion beyond mobile into automotive, IoT, and computing segments created 30%+ YoY growth in non-handset revenue streams
  • TECHNOLOGY: Premium Snapdragon platforms maintain 20% performance lead over competitors, securing high-margin contracts with flagship device manufacturers
  • PARTNERSHIPS: Long-standing relationships with all major OEMs including Apple, Samsung and Xiaomi ensure consistent device design wins and stable market share
  • INNOVATION: R&D investment at 22% of revenue drives next-gen 5G Advanced and 6G development, maintaining technology leadership position in wireless

Weaknesses

  • CONCENTRATION: Overreliance on smartphone market which has plateaued in growth, with 60% of revenue still derived from mobile segment despite diversification
  • COMPETITION: Increasing pressure from in-house chipset development at key customers like Apple and Samsung threatens long-term licensing and chip sales
  • CYCLICALITY: Revenue fluctuations tied to smartphone refresh cycles create quarterly volatility and complicate forecasting for investor relations
  • LITIGATION: Ongoing legal challenges to licensing model from regulatory bodies and customers creates uncertainty in stable revenue streams
  • TALENT: Competitive hiring landscape in AI and wireless engineering leads to 15% higher recruitment costs and extended vacancies in key R&D positions

Opportunities

  • AUTOMOTIVE: Rapidly growing connected and autonomous vehicle market projected to reach $400B by 2030, with current Qualcomm design wins in 25+ brands
  • AI: Edge AI processing capabilities can drive new licensing models and chip sales with projected 45% CAGR in on-device AI market through 2028
  • IoT: Expanding ecosystem of connected devices across industrial, retail, and smart home sectors creating $30B+ addressable market for Qualcomm technologies
  • XR: Growing adoption of extended reality devices opens new high-margin chip segment with potential for 50% gross margins on specialized processors
  • INFRASTRUCTURE: Private 5G network deployments for enterprise and industrial applications creates new channel partnership opportunities and revenue streams

Threats

  • GEOPOLITICS: US-China tensions and export controls potentially restricting access to key markets representing 35% of global semiconductor demand
  • SUBSTITUTION: Alternative connectivity technologies and open-source RISC-V architecture challenging Qualcomm's proprietary standards and licensing model
  • REGULATION: Increasing antitrust scrutiny and legal challenges to Qualcomm's licensing practices that represent 30% of company profits
  • COMMODITIZATION: Proliferation of low-cost chip alternatives from MediaTek and others creating margin pressure in mid-range and entry segments
  • SUPPLY CHAIN: Persistent semiconductor manufacturing constraints limiting ability to fulfill demand and potentially losing market share to competitors

Key Priorities

  • DIVERSIFICATION: Accelerate revenue diversification beyond smartphones into automotive, IoT and XR to reduce reliance on maturing mobile segment
  • INNOVATION: Increase R&D investment in AI capabilities to maintain technological leadership and create new licensing opportunities across all segments
  • PARTNERSHIPS: Strengthen OEM and channel relationships to counter threats from in-house chip development and secure long-term design wins
  • LICENSING: Develop new licensing models that address regulatory concerns while preserving high-margin recurring revenue streams
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To accelerate digital transformation and drive revenue growth through innovative connectivity solutions by becoming the undisputed global leader in wireless technology

DIVERSIFY REVENUE

Accelerate non-handset business growth across verticals

  • AUTOMOTIVE: Increase Snapdragon Digital Chassis design wins from 32 to 40 automotive OEMs by Q4, with 50% converting to production contracts
  • PARTNERSHIPS: Establish 5 new strategic alliance partnerships with tier-1 IoT platform providers, generating $25M in pipeline opportunities
  • VERTICALS: Launch specialized sales teams for top 3 non-mobile verticals with dedicated technical pre-sales support and vertical-specific marketing
  • PIPELINE: Achieve 55% non-handset revenue contribution by end of FY25, up from current 45%, through focused account expansion strategies
OWN THE EDGE

Establish leadership in on-device AI processing

  • PLATFORM: Launch unified AI+connectivity development platform supporting all Qualcomm products with 10K+ active developers by EOY
  • BENCHMARKS: Publish independently verified benchmarks demonstrating 30%+ performance/watt advantage over competitors for edge AI workloads
  • ECOSYSTEM: Secure optimization partnerships with top 5 AI model providers to ensure seamless deployment on Qualcomm platforms
  • SOLUTIONS: Develop 3 complete vertical-specific AI reference solutions with pre-trained models and documentation for faster time-to-market
SECURE THE CORE

Strengthen and modernize licensing business model

  • CONTRACTS: Complete renewal negotiations with top 3 OEM licensees, securing 5+ year agreements with favorable terms and expanded scope
  • COMPLIANCE: Implement enhanced license compliance tracking program, increasing audit coverage by 30% and recovering $15M in underpayments
  • INNOVATION: File 2,500 new patent applications in strategic growth areas including AI, automotive, and advanced connectivity standards
  • STRUCTURE: Develop next-generation licensing model addressing regulatory concerns while preserving margin profile for Board approval
WIN PREMIUM

Dominate high-value segments across all verticals

  • FLAGSHIP: Maintain 80%+ share of premium smartphone processor market with next-generation Snapdragon platform launch in Q3
  • MARKETING: Execute repositioning campaign highlighting AI capabilities, reaching 85% awareness among target decision-makers
  • SALES: Increase average selling price by 12% through improved mix management and value-based pricing strategies in all segments
  • FORECASTING: Implement ML-powered demand forecasting system reducing forecast variance by 40% and improving inventory management
METRICS
  • Annual Licensing Revenue Growth: 8%
  • Non-Handset Revenue Contribution: 55%
  • Premium Segment Market Share: 80%
VALUES
  • Innovation
  • Execution
  • Partnership
  • Inclusion
  • Integrity
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Align the learnings

Qualcomm Sales Retrospective

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To accelerate digital transformation and drive revenue growth through innovative connectivity solutions by becoming the undisputed global leader in wireless technology

What Went Well

  • DIVERSIFICATION: Non-handset revenue grew 40% YoY, now representing 45% of total revenue, exceeding diversification targets by 10%
  • AUTOMOTIVE: Secured design wins with 7 additional automotive OEMs, bringing total to 32 brands using Qualcomm technology
  • MARGINS: Gross margin improved 2.5 percentage points to 58.7% due to favorable product mix and licensing revenue growth
  • INVENTORY: Reduced channel inventory levels by 22% quarter-over-quarter, improving working capital efficiency

Not So Well

  • CHINA: Handset shipments to Chinese OEMs declined 12% below forecast due to macroeconomic challenges and increased competition
  • LITIGATION: Unexpected legal settlement costs related to licensing disputes reduced EPS by $0.14 for the quarter
  • FORECASTING: Revenue guidance missed analyst expectations by 4%, resulting in 7% stock price decline following earnings announcement
  • SUPPLY CHAIN: Continued constraints in advanced node manufacturing capacity limited ability to fulfill demand for premium products

Learnings

  • SEGMENTATION: High-tier products continue outperforming mid-range in both volume and margins, suggesting need for portfolio rebalancing
  • PIPELINE: Sales cycle for automotive and IoT customers 60% longer than traditional mobile, requiring earlier engagement
  • COMPETITION: MediaTek gaining share in mid-range segment through aggressive pricing and increasing performance parity
  • CHANNELS: Direct enterprise sales initiatives showing 35% higher conversion rates than partner-led approaches for new verticals

Action Items

  • FORECASTING: Implement enhanced demand forecasting models incorporating macroeconomic indicators and channel inventory data
  • SALES: Restructure sales organization to create dedicated teams for high-growth vertical markets with specialized expertise
  • MARKETING: Develop comprehensive messaging framework highlighting AI capabilities to reposition brand perception beyond connectivity
  • PARTNERSHIPS: Establish strategic supply agreements with key foundry partners to secure manufacturing capacity for premium segments
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To accelerate digital transformation and drive revenue growth through innovative connectivity solutions by becoming the undisputed global leader in wireless technology

Strengths

  • EXPERTISE: Extensive experience optimizing AI workloads on mobile platforms with Neural Processing Units already in current generation Snapdragon chips
  • ARCHITECTURE: Proprietary heterogeneous computing architecture enables efficient AI inferencing with 40% better performance per watt than competitors
  • ECOSYSTEM: Developer platform and tools supporting over 100,000 developers building AI applications optimized for Qualcomm hardware
  • SCALABILITY: Unified AI software stack enabling deployment across diverse compute platforms from smartphones to automotive and IoT devices
  • PARTNERSHIPS: Strategic collaborations with leading AI model providers like OpenAI and Anthropic to optimize models for Qualcomm hardware

Weaknesses

  • PERCEPTION: Market still views Qualcomm primarily as connectivity provider rather than AI leader, limiting premium positioning opportunities
  • FRAGMENTATION: Multiple AI hardware solutions across product lines creates complexity for developers and slows adoption cycles
  • TALENT: Gap in specialized AI research talent compared to dedicated AI chip competitors with 25% lower headcount in dedicated AI teams
  • DATACENTER: Limited presence in high-performance cloud AI infrastructure where most model training and development occurs
  • MONETIZATION: Unclear revenue models for AI capabilities beyond hardware sales, unlike competitors with subscription-based AI platforms

Opportunities

  • ON-DEVICE: Growing demand for on-device AI processing driven by privacy concerns and real-time needs, growing at 40% annually through 2028
  • AUTOMOTIVE: AI-powered ADAS and autonomous driving systems represent $80B market opportunity where Qualcomm has existing relationships
  • EDGE: Enterprise shift toward edge AI deployments to reduce cloud costs and latency aligns with Qualcomm's power-efficient processing expertise
  • CUSTOMIZATION: Specialized AI hardware for vertical applications (healthcare, industrial) commands 30% price premium over general-purpose solutions
  • INTEGRATION: Combining AI with connectivity expertise creates unique value proposition for applications requiring real-time data processing and communication

Threats

  • SPECIALIZATION: Purpose-built AI accelerators from Nvidia, AMD and startups outperforming general-purpose mobile platforms for specific workloads
  • COMMODITIZATION: Rapid innovation cycles making AI hardware capabilities obsolete within 18-24 months, creating pressure for faster development
  • CAPITAL: Competitors investing billions in AI-specific R&D and manufacturing capacity, potentially outpacing Qualcomm's resource allocation
  • STANDARDS: Emerging AI frameworks and standards being developed without Qualcomm's leadership could disadvantage proprietary approaches
  • MARKET TIMING: Window of opportunity closing as OEMs select strategic AI hardware partners for next-generation product development cycles

Key Priorities

  • INTEGRATION: Develop and market unified AI+connectivity platform highlighting unique advantages of combined wireless expertise and AI processing
  • VERTICALIZATION: Create specialized AI solutions for high-growth segments like automotive, XR and industrial IoT with dedicated sales teams
  • PARTNERSHIPS: Expand strategic collaborations with AI model providers to ensure Snapdragon becomes preferred platform for edge deployment
  • MONETIZATION: Develop recurring revenue streams from AI capabilities through specialized tools, optimization services and licensing models
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