Speaker 1: Quidcom stock significantly higher around ten percent. The story. Things
Speaker 1: look like they're improving in the smartphone market globally, and
Speaker 1: within that there's a lot of nuance. There is specific
Speaker 1: action in China, and there's strength also for the chips
Speaker 1: that go into cars in the automotive sector. Delighted to
Speaker 1: say that Qualcomm CEO Christiano Andman joins us. Now, good
Speaker 1: morning to you, Christiano, and let let's start with China.
Speaker 1: What you guys said is that sales to Chinese handset
Speaker 1: makers serves forty percent in the first half. But I
Speaker 1: wonder what the story behind that is in the end market,
Speaker 1: what's happening, particularly with Android based platforms for the Chinese consumer.
Speaker 2: Very good good morning to you as well. It's a
Speaker 2: great morning I think today. But look the story on
Speaker 2: Hins's in China, it's pretty simple. We've seen the market
Speaker 2: had stabilized. We had said about that a couple quarters ago,
Speaker 2: and users are buying better phonks.
Speaker 3: It's really for us.
Speaker 2: A story of flagship and high years within the Android,
Speaker 2: especially a lot of the flagships that are launching with Genai.
Speaker 2: I think we see the very beginning of Genai coming
Speaker 2: to devices, and that actually drove you know, a lot
Speaker 2: of the growth and it's forty not only in this quarter,
Speaker 2: but actually expected to have the same in the next
Speaker 2: as we as we look at the guide, he has
Speaker 2: been a good story as the smartphone markets stabilize. It
Speaker 2: in the Android flagship has stay resilient.
Speaker 1: Christiana, as you know and our audience knows. We will
Speaker 1: talk about on device when it comes to Generatorive AI.
Speaker 1: Let's just linger a moment longer on China. It looks
Speaker 1: like some of the domestic players that Android base are
Speaker 1: gaining market share against Apple and the iPhone. You see
Speaker 1: that in the IDC data, you see it in the
Speaker 1: Counterpoint research data. If that is the case, where the
Speaker 1: domestic players are gaining that market share, what does it
Speaker 1: mean for Qualcom.
Speaker 2: Look the way you should think about our position in
Speaker 2: China in the Hintson market, we have been very focused
Speaker 2: on the premium and high tier with snap Dragon. So
Speaker 2: when an Android OEM from our customers show me OPO
Speaker 2: one plus on our Vivo when they're selling a flagship device,
Speaker 2: we have a lot of content.
Speaker 3: Not only we have the modem content, but we have
Speaker 3: a lot of.
Speaker 2: The application processor, the AI engine, So that has been
Speaker 2: a positive development, and that's what is being driving the
Speaker 2: content increase and the ASP increase, especially when the mix
Speaker 2: changes to a premium device. The fact that the Android
Speaker 2: flagship in China with the Chinese OEMs had been stable,
Speaker 2: proven to be resilient, and see positive momentum at the
Speaker 2: mixed get richer Chinese users are buying a better phone.
Speaker 2: That's a good story for Qualcom and it's reflected in
Speaker 2: the numbers.
Speaker 4: Is there any anxiety from a political perspective, Christiana? You've
Speaker 4: obviously whathered the fact that you're only Huawei four G phones.
Speaker 4: Now you're actually seeing basically ultimately revenue pull away by
Speaker 4: the end of this year for Huawei. But the geopolitical
Speaker 4: context is clear. How difficult is it to you to
Speaker 4: be so dependent on China.
Speaker 2: Look, the first thing I want to say is our
Speaker 2: business is not just China, and I think what happened
Speaker 2: with this smartphone, this is a phenomenon globally. I think
Speaker 2: you even saw Samsung when they talk about it their
Speaker 2: earnings called they have a commentary about the device. AI
Speaker 2: opportunity for flagships is real. So the second part is
Speaker 2: the way we think about everything is if you have
Speaker 2: a leadership position in technology, you're going to have a
Speaker 2: big business in China. It's just a function of the
Speaker 2: size of the market. And I think that's been true
Speaker 2: not only for Qualcom, for a lot of other companies
Speaker 2: that have leadership product position.
Speaker 3: And to this.
Speaker 2: Point, I think we have been seeing our business in
Speaker 2: China can continue to be a stable business. We have
Speaker 2: not been restricted by Like everybody else in the industry,
Speaker 2: you have to monitor the situation. I think this is
Speaker 2: how we have to navigate in the semi conductor industry.
Speaker 2: But we're happy with the results we have right now.
Speaker 4: Let's go therefore to the technology that is winning out
Speaker 4: and you talk about AI on device, how are people
Speaker 4: using it? You've got a snaptrack at eight series Jen
Speaker 4: three mobile platform that's really meant to be supporting generative
Speaker 4: AI at the moment, basically with a personal assistment assistant potentially,
Speaker 4: But how is that a reality for any or many?
Speaker 2: Look, I love talking about this and I wish I
Speaker 2: had a lot of time, so I'm going to try
Speaker 2: to summarize it in just a few minutes.
Speaker 3: The first thing that is happening.
Speaker 2: You need to think about AI running on the cloud
Speaker 2: and the device is a new way of doing computing,
Speaker 2: and we're just at the very beginning of the use cases.
Speaker 2: So right now we can see, for example, multiple tens
Speaker 2: of use cases, and I expect that within six months
Speaker 2: from now will be hundreds, if not more. What are
Speaker 2: people doing with it? You see some use cases of
Speaker 2: life transfer. You can watch a video, you can add
Speaker 2: a subtitle in any language you want. You can do
Speaker 2: a lot of real time photo editing. You can change
Speaker 2: a lot of the images with the way you like it.
Speaker 2: You can create new images, you can summarize documents. But
Speaker 2: the most important thing is the other thing that it's
Speaker 2: going to bring the phones. So I'm going to give
Speaker 2: you a point to an example. More and more you
Speaker 2: do more things on the phone today, but there are
Speaker 2: things that you're going to think about it. You know what,
Speaker 2: I have to respond to this very long email. I'd
Speaker 2: rather wait until I get to my laptop. When you
Speaker 2: think about a Microsoft Copilot in the phone, for example,
Speaker 2: you're going to see a lot more use off those devices.
Speaker 2: We're going to see much much more productivity. So we're
Speaker 2: the beginning of something great. It's going to take some time.
Speaker 2: Use cases are developing. You should think about this what
Speaker 2: happened with the smartphone. In the beginning, there's just a
Speaker 2: few apps in the app store, but then all of
Speaker 2: a sudden, the apps started to define the user experience.
Speaker 3: That's how we feel about AI. We're at the beginning.
Speaker 2: It's going to take a little bit of time, but
Speaker 2: the signs are great for.
Speaker 1: Our Bloomberg television and radio audiences worldwide. We're speaking to
Speaker 1: the clowdcom CEO, Christiano Amon, and I think you summed
Speaker 1: it up well, Christiana. We are in the very early
Speaker 1: stages of a world where we're running ten billion parameter
Speaker 1: models locally on device on the smartphone side, but we're
Speaker 1: already talking about the AIPC.
Speaker 3: Right.
Speaker 1: You guys have your latest generation which will come to market,
Speaker 1: Snapdragon ten Elite and Plus, and it's very impressive combination
Speaker 1: of CPU, GPU, NPU. Give me a minute, we'll talk
Speaker 1: about MPU. But I still think a lot of people
Speaker 1: struggle to say, what am I going to do sitting
Speaker 1: in a cafe running a ten billion parameter model while
Speaker 1: I have a cappuccino, Like, what's the actual real world
Speaker 1: use case?
Speaker 2: Okay, you know, we could not be more excited about
Speaker 2: what's happened in PC. I really think PC is reborn
Speaker 2: with the Snapdragon Accalite. And it's not only because of
Speaker 2: the performance, but because actually AI. By the way, we
Speaker 2: can run twenty billion parameter on the ac elites. This
Speaker 2: is it's it's evolving very very fast. But the use
Speaker 2: case are really incredible. Think about now this AI running
Speaker 2: all the time. Everything you're doing on your PC, it
Speaker 2: is running, and it's private. It's your data, it's your
Speaker 2: use The ICE learning about you, stray to understand your intent.
Speaker 2: And we starting to see right now with the Microsoft
Speaker 2: Copilot that you can use the Copilot for everything, for PowerPoint,
Speaker 2: for Excel, for ward or email.
Speaker 3: But it's much more.
Speaker 2: The AI is helping you recall documents that you have
Speaker 2: on that you've seen or you have on your computer.
Speaker 2: It's going to help you do things, gonna reminding of
Speaker 2: things that you have to do, or even it's gonna
Speaker 2: help you with tasks that you need you don't know
Speaker 2: how to do it, and they will help you one
Speaker 2: step of the way. That's going to change how we
Speaker 2: use our computers. And the interesting thing is how do
Speaker 2: you do this in a way that you don't compromise
Speaker 2: battery life? A CPU and a GPU have a job
Speaker 2: to do. And that's why when you buy a PC today,
Speaker 2: you want a fest CPU and a fast GPU, but
Speaker 2: you need a whole new engine that needs to do
Speaker 2: something else and needs to do it all the time
Speaker 2: and not compromise battery life.
Speaker 3: That's the Qualcom story, and what is.
Speaker 4: The market share story of Qualcolm. We've been hearing a
Speaker 4: lot about other competitors getting into the AIPC space.
Speaker 2: I think this is the great story for Qualcom because
Speaker 2: we're new, we're just entering the market. I think we're
Speaker 2: going to see a lot of the devices coming up
Speaker 2: in the second half of this year. I encourage everybody
Speaker 2: to watch the Microsoft build and the incredible things they're
Speaker 2: doing with the new Windows, and I think what's going
Speaker 2: to happen is Qualcom is coming in with the leadership product.
Speaker 3: We like the design traction.
Speaker 2: Financially, that's going to be more of a fiscal twenty
Speaker 2: five event because a lot of the laptops are going
Speaker 2: to be in the shelves for the second half and
Speaker 2: back to school. But the product momentum is great. And
Speaker 2: here's how we should think about Qualcom market share in general.
Speaker 2: One thing about the company, and we and it's been
Speaker 2: the history of the company. Everything that we set ourselves
Speaker 2: to do. The track record is actually not bad. When
Speaker 2: we entered the Wi Fi or we became number one,
Speaker 2: we entered the rfron end, we became number one automotive.
Speaker 2: We said we're going to go into automotive. I think
Speaker 2: our story there is very, very good. We're becoming the
Speaker 2: prefer partner of the industry. We said we're going to
Speaker 2: enter the metaphorse. We have every single design. Now we're
Speaker 2: saying we're going to enter the PC and we started
Speaker 2: off the gate with the leadership and the product. So
Speaker 2: you know, as we continue to execute, time is going
Speaker 2: to show that we can gain share and can be
Speaker 2: a significant player.
Speaker 3: After that is going to be industrial.
Speaker 2: As we continue to execute on the growth, diversification of
Speaker 2: the company, fight
Speaker 4: Into quill Com CEO Cristiano Amon, we thank you for
Speaker 4: bringing the energy today.