It has certainly been an interesting year for chip giant Qualcomm. Revenues are down and, under pressure from New York hedge fund Jana Partners, the company, which generates revenues in excess of $100billion per year, has had to unveil a strategic realignment plan that focuses the business on lower tier smartphones, small cells, data centres and the Internet of Things. It has also had to shed 4500 jobs.

While Salvatori is responsible for Qualcomm’s European strategy, ensuring that OEMs and operators drive 3G and 4G adoption, he also provides strategic direction and oversight for the company’s business development and operational activities throughout the region.

According to Salvatori, despite the problems confronting Qualcomm, there are plenty of opportunities for the business going forward.

There are a number broad growth opportunities across a wide array of industries, market segments and product verticals,” he says. “As a company, we are highly focused on – and see tremendous growth in – the smart home (from a networking, smart gateway and connected devices perspective), automotive, healthcare and wearable devices, to name just a few.”

At the heart of the company’s plans for the future is the Internet of Things – or the Internet of Everything (IoE) in Qualcomm’s opinion – and it is on course to generate revenues of more than $1billion from this fast growing, if ill defined, market.

“The requirements associated with IoE have influenced our portfolio development for years and we are benefiting from it because we are able to deliver products that solve the key needs of manufacturers working in this space, such as deep integration, optimisation for size, power and cost, security and interoperability.”

The company has sought to tailor its solutions for different IoE segments; whether that is the smart home, automotive, drones, healthcare or wearable devices.

“Qualcomm is, for example, heavily involved in the development of the connected car,” Salvatori explains. ”We have developed an automotive grade processor for infotainment, the Snapdragon 602A, with support for three touch screens, media streaming, navigation, instrumentation and Wi-Fi hotspots. The 602A has been designed and manufactured specifically for the automotive industry and meets automotive standards.

“The Snapdragon 400 powered the first two Android Wear flagship smartwatches when the OS launched in 2014 as a result of our long history of collaboration with Google,” he says. According to Salvatori, Snapdragon powers more than 20 announced wearables devices in more than 30 countries, with more than 20 additional designs in development with major OEMs, fitness and fashion brands supporting Android Wear, Android, Tizen and WearableOS.

Recently, Qualcomm Technologies announced its first products created specifically for the rapidly growing consumer drone ecosystem.

“The Qualcomm Snapdragon Flight is a highly integrated board for drone development, based on the Snapdragon 801 mobile processor,” he explains.

Refocusing the business

The decision to refocus the business comes as competition in the high-end smart phone market intensifies.

According to research from Strategy Analytics, while the smartphone chipset market continues to grow strongly, Intel, Samsung LSI and Huawei’s HiSilicon have all been gaining market share at Qualcomm’s expense.

Qualcomm has also been affected by the slower adoption of its Snapdragon 810 application processor, as well as by increased competition. Its smartphone revenue share has dropped significantly, although it has seen growing demand for its mid-tier and low-tier Snapdragon 600, 400 and 200 chips has offset that decline.

Qualcomm’s decision to focus on the IoT is not, however, without risk. Competition is intense, with a host of medium, small and micro businesses entering the market.

But, while Salvatori agrees that it is competitive, he believes the company’s strategy will work. “Our strategy is to target the most applicable segments with robust and applicable connectivity and intelligence portfolios.

“This will enable us to optimise and customise both portfolios in ways that are aligned to the needs of that particular segment – for instance, scaling for throughput, power, interoperability and security features. It is an approach that takes on some of the most significant challenges head on.”

Saltvatori argues that Qualcomm is ‘absolutely committed’ to leading the next wave of mobile computing and delivering profitable growth in new areas beyond the smartphone.

“We have identified networking, mobile computing, IoE and automotive as the highest return areas and will focus our investments there. Based on a mix of third-party estimates and our own forecasts, the serviceable addressable opportunity for these four areas could be worth $20bn by 2020.”

Earlier this year, Qualcomm entered into a joint venture with imec, SMIC and Huawei to bring 14nm process technology to China.

“Qualcomm has a history of helping accelerate the development of China’s semiconductor industry,” Salvatori noted. “These types of collaborations are significant milestones for the global IC industries as it will help to strengthen the entire supply chain by connecting upstream and downstream companies with leading R&D and other resources. In addition, it will help to meet domestic and international customers demand for higher performance mobile devices.

“It’s a win-win partnership that reinforces Qualcomm’s commitment to the entire semiconductor ecosystem in China,” he believes.

Despite a difficult twelve months Salvatori believes the company is now set for a new stage of growth: transforming the edge of the Internet.

“We have the scale and technology leadership to drive profitable growth. We are applying our core smartphone technologies into rapidly expanding adjacent opportunities in a disciplined way, and carefully selecting the opportunities where we can create the most value and generate the best returns,” he concludes.

Enrico Salvatori

Enrico Salvatori, senior vice president and president of Qualcomm Europe, is responsible for Qualcomm’s 3G and 4G European strategy, as well as for providing strategic direction and oversight for business development and operational activities throughout the region.

He joined Qualcomm in February 2002 as a senior director for technical marketing in Europe for Qualcomm Communications Technologies and was responsible for operator relationships in Southern Europe.

Prior to joining Qualcomm, Salvatori was chief technology officer at Italian handset manufacturer TELIT and technical director at satellite service provider Elsacom/Finmeccanica.