Qualcomm And Daimler Announce Strategic Collaboration To Develop In-Car Tech

Leading mobile chipmaker Qualcomm’s (NASDAQ:QCOM) subsidiary, Qualcomm Technologies, recently announced a collaboration with Diamler AG to develop new technologies that will enable wireless charging of electric vehicles and in-car wireless charging of mobile devices. In the first phase of the collaboration, the companies will focus on transforming future vehicles with mobile technologies that enhance in-car experiences and vehicle performance such as 3G/4G connectivity, wireless charging technology for in-vehicle use and implementation of the Qualcomm Halo Wireless Electric Vehicle Charging (WEVC) technology. (Read Press Release)

In a joint statement, Daimler and Qualcomm said they were assessing the application of wireless technology to charge their electric vehicles (EV) and plug-in hybrid EVs without ever having to plug them in. Chief among the technologies that the new partnership aims to explore is one that allows plug-in electric vehicles to charge even without being plugged in. This would be made possible by using Qualcomm’s Halo WEVC technology, which can be built into individual parking slots to allow vehicles to charge wirelessly.

Along with Halo, Qualcomm will also provide its WiPower wireless charging technology to charge mobile devices, such as smartphones, tablets and smart watches inside Daimler’s vehicles. Unlike existing wireless charging standards, which require devices be placed on the charging pad, WiPower only needs to have the device placed within the charge area to work. Daimler also plans to include built-in 3G/4G connection into its cars, but the company did not specify how it plans to do that.  Back in 2010, Qualcomm acquired WiPower, a technology for wireless in-car device charging.

This is not the first time that Daimler has teamed up with Qualcomm to develop smart vehicles using the chipmaker’s technologies. Both companies have worked together in the past, providing the Mercedes AMG Petronas Formula One team with sensor-based devices running on Qualcomm’s line of Snapdragon chipsets for the team’s race cars. (Read Press Release)

Qualcomm recently provided guidance on how innovative the automotive sector has become. The cars are absorbing innovative smartphone technology at a very fast pace. Qualcomm strategically entered the automotive market in January 2014, and has supplied modems and its high-performance smartphone processor (Snapdragon) to over a dozen global automakers since then. Currently, there are around 20 million cars equipped with Qualcomm chips. Even though the company makes the most money selling the wireless chips and processors for a large chunk of the smartphone market, it expects about 10% of its chip division revenue to come from non-smartphone devices in 2015.

Our price estimate of $71 for Qualcomm is almost in line with the current market price. For fiscal year 2015, we estimate the company to report revenue of $29 billion and net income of $8.1 billion. Also, our non-GAAP EPS estimate is $4.7 as compared to the market consensus of $4.82.

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