Qualcomm’s (NASDAQ:QCOM) portfolio of app processors may find a place in some of the most popular smartphones sold worldwide, but the company hasn’t seen that kind of success in tablets yet. This is partly because there haven’t been many tablets as popular as the iPad (which uses Apple’s own A series of processors), and also because Qualcomm’s chipsets have never been the best when it comes to graphics performance. Unlike smartphones, where power efficiency is key, tablet manufacturers place a greater importance on graphics as gaming is perceived to be a key differentiator for high-end consumer tablets. This has allowed new mobile entrants such as Nvidia (NASDAQ:NVDA) to tout their own graphics dominance in the PC market to gain a bigger market share in the non-iPad tablet arena. However, all this may change with Qualcomm’s new Snapdragon 800 app processor which will make its way into mobile devices in the second half of the year.
Qualcomm’s GPU comes of age
- How Did Qualcomm Fare In Q2’16 Earnings?
- What Can We Expect From Qualcomm’s Q2’16 Earnings?
- How Has Qualcomm’s Revenue Mix Changed In The Last 5 Years?
- What is Qualcomm’s Revenue & EBITDA Breakdown?
- What is Qualcomm’s Fundamental Value based on Expected 2016 Results?
- By What Percentage Did Qualcomm’s Revenue And EBITDA Grow In The Last 5 Years?
The Snapdragon 800 was introduced way back in January at the Consumer Electronic Show (CES) 2013, but Qualcomm allowed third-party reviewers to test the chipset only recently. The 800 seems to have scored well on all parameters, but what stood out was a marked improvement in its GPU performance. According to tech blog site AnandTech, Qualcomm’s Adreno GPU delivered around 62.5% better performance than even the iPad 4.  In comparison, Nvidia’s slideshow from the CES launch of Tegra 4 suggests that the newest Tegra is only slightly ahead of the iPad 4 in GPU performance. While these may only be initial tests and not reflect real-world scenarios, it does seem that Qualcomm is finally making its tablet ambitions clear.
The tablet market is currently heavily dominated by the iPad but that dynamics is changing slowly with Android making rapid strides in a relatively nascent market. According to latest data from IDC, the iPad’s market share declined from close to 60% in Q1 2012 to less than 40% during the same period this year. At the same time, the tablet market continues to explode, recording y-o-y growth rates of over 140% in the first quarter of 2013. A bulk of the growth is coming from non-iPad tablets with the Android platform growing by almost 250% year-over-year.
Second Half 2013 Key For Qualcomm’s Tablet Future
With the Android tablet market finally blossoming, Qualcomm stands to gain from this new-found GPU strength and tablet focus. The company cannot however rely on its baseband superiority, which has served it well in the smartphone market, to help it in the tablet space. Many non-iPad tablets launched in the market have done away with 3G/4G capabilities and are instead opting for Wi-Fi only. Even Microsoft has chosen to adopt this path with its Surface tablets. This sort of evens the tablet playing field since Qualcomm will have to compete solely on the technological superiority of its application and graphics processors.
To gain an upper hand in application processors and differentiate itself from the crowd, Qualcomm had long developed its own architecture on top of the widely used ARM instruction set. With the Snapdragon 800, it seems the company has got the GPU part figured out as well. There have already been rumors about Qualcomm having secured design wins in the next-generation Google Nexus 7 and Microsoft’s Surface tablets as well. Having already used its LTE baseband superiority to corner a big part of the high-end smartphone market, Qualcomm seems to be readying itself for a big tablet splash in the coming months. The second half of 2013 is about to get very interesting for Qualcomm.Notes: