Leading mobile chipmaker Qualcomm recently provided guidance on how big the Internet of Things (IoT) sector is for the company. The company said it made $1 billion in revenue last year on chips used in a variety of city infrastructure projects, home appliance, cars and wearables. There were 120 million smart home devices shipped with Qualcomm chips in them last year. In addition, there are 20 million cars equipped with its chips, and Qualcomm silicon is used in 20 types of wearable devices. Even though the company makes the most money selling the wireless chips and processors for a large share of the smartphone market, it expects about 10% of its chip division revenue to come from non-smartphone devices in 2015.
In the semiconductor and telecom industries, along with Qualcomm, other major IoT players are AT&T, Cisco, ARM Holdings, Intel, and Samsung Electronics. Qualcomm doesn’t break out its IoT revenue (like Intel does) so we don’t know the precise size of the company’s IoT offering right now. But that doesn’t mean it’s not positioning itself in the space
In this article, we discuss the growth potential of the IoT segment and how Qualcomm is adapting its business model to accommodate this major trend.
Our price estimate of $71 for Qualcomm is marginally higher than the current market price.
