The Six Five Team discusses some announcements from Qualcomm at IAA Mobility in Munich, Germany and the AWS-BMW tie up.
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Transcript:
Daniel Newman: We had The Six Five represented this week at Qualcomm IAA. I’m missing my bestie, but I brought our next newest bestie part of The Six Five, Diana Blast, brought the connected series there and I can’t wait to put those out. She did a great job. The IAA, it’s an event that converges mobility and technology and then automotive. And every other year they flip between transportation and mobility, so this is the mobility year still full of cars, vehicles, drones, two-wheelers. Spent a lot of time with Qualcomm, spent some time with CEO, Cristiano Amon and automotive chief Nakul Duggal as well as chief marketing officer Don McGuire.
So, the company was in full force there, had all its big wigs there. Automotive has been a massive focus for Qualcomm. We’ve talked about this a lot though on the show, so I’m not going to beat that to death. But that 30 billion pipeline is coming to fruition with these continued design wins that are coming from BMW, from GM, from Mercedes-Benz. By the way, there were some killer concept cars there, Pat, really, really cool concept cars, which is by the way, it’s bringing love together for me vehicles-
Patrick Moorhead: Well, it’s like torture. You see these cars that may or may not actually ever see the light of day.
Daniel Newman: We just got to get rich enough that we can buy the concept car.
Patrick Moorhead: Yeah, probably not.
Daniel Newman: Mercedes had a killer cool car and so did Porsche, which by the way I… By the way, is it Porsche or Porsche?
Patrick Moorhead: It depends on where you are. The-
Daniel Newman: I’ve never quite known what’s right.
Patrick Moorhead: German pronunciation would be the er Porsche.
Daniel Newman: Okay, well, they’re right and we’re all wrong.
Patrick Moorhead: Well, they created the name.
Daniel Newman: Nein.
Patrick Moorhead: Dr. Porsche.
Daniel Newman: Anyways, Qualcomm focused on three or four really interesting things at this year’s. One is we’re moving from ADAS and sensor-based AI in these vehicles to generative AI in the infotainment and management maintenance of the vehicles. Some digital assistant updates we’re focused on is how generative AI is going to be part of these building blocks of the digital chassis. You’re going to be able to have an interactive digital assistant. And this brings a really interesting conversation about we’re moving from device-based automotive control for infotainment to moving to fully onboarded generative capabilities because we all know that most cars today are, a lot of people are plugging into Apple play.
A lot of people are plugging into Android-based systems. By the way, this still could be Android based in terms of the interface, but in terms of are we using the smartphone as the compute or are we using the vehicle as a compute? And then for generative tools it’s where does that processing actually exist? Very interesting, but some very future forward-thinking about how this digital assistant is going to work together. Another one was the two-wheeler, Pat. We’ve talked a lot about cars, but this was pretty cool, so-
Patrick Moorhead: And that was teased in the Financial Analyst Day you and I attended in New York this year.
Daniel Newman: Yes. One of the things that Qualcomm really focused on new partnerships with companies like Harley Davidson. By the way, it’s not only cars that are going to move to electrification. It’s not only cars that are going to need a digital chassis. So, the ability to put building blocks of navigation and telematics and ADAS and infotainment and then be able to provide the capabilities to do this with a smart chip set and then all on electrification, it’s going to come to bikes too. Qualcomm is able to identify a fairly large market expansion opportunity and also an opportunity to drive more design pipeline. There’s a strong amount of demand. It’s not just two-wheeler, I think it’s just the ability for Qualcomm to be the provider of intelligent platforms for anything that rolls or flies or floats. I’m waiting to hear about the boating interfaces that come next, Pat.
Patrick Moorhead: Yeah, the corporate yacht.
Daniel Newman: The corporate yacht and the yet and the yar and all the other things that you move around in. That was another strong thing. There’re a couple of other things that were interesting too, is more partnerships, another one with BMW was announced. And Pat, this is just a trickle of constant for Qualcomm and you’ve seen they’ve flip-flopped with NVIDIA. NVIDIA was big… And NVIDIA, while it’s gotten all this data center growth in business, quietly Qualcomm’s come underneath them and swiped a lot of design pipeline. Remember, this doesn’t happen over one or two years. What happens is over four or five, six years, this gets designed in and the revenue comes. That’s why a $30 billion pipeline is only yielding three or 400 million in revenue on a quarterly basis because these designs take time to come out but then the revenue pivots.
What has happened is you’ve seen a steady flat to decrease across NVIDIA’s revenue. It’s because a lot of these new designs have gone over to Qualcomm, which has been a real strength in its diversification. It’s been necessary given the rest of the portfolio and what’s gone on in the market with mobile devices for instance. And then the last thing, Pat, that was a big one, is a design partnership with a mega hyperscale cloud provider for vehicles of the future. That was a commitment that the companies, AWS and Qualcomm made to co-innovate around the future in automotive and mobility. And that came out as well, so lots of announcement. I realize we’re getting close to that time and you and I are going to have to run. So, I’m going to hand you the mic to give the last thoughts on the Qualcomm stuff. Since you weren’t there, I figured I’d try to cover most of the ground here.
Patrick Moorhead: Yeah, you pretty much covered every single announcement related to Qualcomm there.
Daniel Newman: Yeah, I was there.
Patrick Moorhead: What I would like to dive into though is the very provocative announcement. It was really a three-way announcement between AWS, Qualcomm and BMW. By the way, very rarely do you see this from AWS. While I don’t have all of the skinny on it, I feel like I can say enough to say that Qualcomm likely brought AWS BMW and BMW is going all in on the A100 or a variance of it. As we know about Qualcomm, their IP, it’s building blocks. Similar building blocks, just more of it that you might find in a smartphone will be super-sized when it comes to Qualcomm’s automotive. If you look at the A100, it’s likely a super-sized version of that.
BMW needed a development environment. And by the way, AWS and BMW said this is about the Neue Klasse, that means the new class of cars set to launch in 2025. That is not a lot of time to be able to crank this out. But there was a quote from Dr. Nicolai Martin, an SVP at BMW, where he tied together AWS and Qualcomm technologies, which we don’t see that often. And I have to wonder what on earth is NVIDIA thinking about all of this. And you gave a little history. In fact, the history goes back all the way to where Intel was the preferred supplier for BMW with Mobileye and then that moved to NVIDIA. And it looks like BMW is all in on Qualcomm at this point. As we found to have a development environment, taking those capabilities to the public cloud where you essentially have endless capabilities will be an interesting thing to follow.
I just have to wonder, is this truly the, I would call it the credible beginning, meaning Qualcomm, there were a lot of… What’s the right word, Yeti sightings on Qualcomm’s AI 100, but it never really made a connection. This is the first public cloud connection we’ve seen for Qualcomm’s data center Silicon. I’m interested to see what’s going to happen in the future here.
Author Information
Daniel is the CEO of The Futurum Group. Living his life at the intersection of people and technology, Daniel works with the world’s largest technology brands exploring Digital Transformation and how it is influencing the enterprise.
From the leading edge of AI to global technology policy, Daniel makes the connections between business, people and tech that are required for companies to benefit most from their technology investments. Daniel is a top 5 globally ranked industry analyst and his ideas are regularly cited or shared in television appearances by CNBC, Bloomberg, Wall Street Journal and hundreds of other sites around the world.
A 7x Best-Selling Author including his most recent book “Human/Machine.” Daniel is also a Forbes and MarketWatch (Dow Jones) contributor.
An MBA and Former Graduate Adjunct Faculty, Daniel is an Austin Texas transplant after 40 years in Chicago. His speaking takes him around the world each year as he shares his vision of the role technology will play in our future.
