Qualcomm Announces Major Workforce Restructuring With Q3 FY 2015 Results

At one point, it seemed like Qualcomm would become the ARM equivalent to Intel in the x86 space. Their Snapdragon processors, equipped with industry leading cellular technology, powered a huge number of devices. Practically every flagship phone of 2013 and 2014 (sans Apple of course) carried a Qualcomm processor inside. But even Intel makes some big missteps, and the Netburst era was certainly one, allowing AMD to provide a much better product. Unlike those days though, there are more than just two players in the ARM SoC space, and Qualcomm has been under some relentless competition (always the best kind) from Samsung at the high end with the Exynos 7420, and on the low end with companies like Mediatek and Rockchip going after the lower margin business.

It’s not fair to blame all of Qualcomm’s woes on one issue, but Qualcomm’s issues began when Apple made the surprise move to 64-bit. On the 32-bit side, Qualcomm had been using custom designed ARM cores, with the last evolution of that being the Krait 450 core in the Snapdragon 805. Krait performed well, but with the move to 64-bit, suddenly the industry felt that the need to check the 64-bit box on the spec sheet in order to compete. Since Qualcomm was not ready with their 64-bit custom core, they had to turn to the standard ARM designs with the A53 and A57 powering their 64-bit lineup. As a result, this affected their market differentiation and performance at the high end.

Qualcomm will finally be moving to FinFET with the Snapdragon 820, and with it will be the custom Kyro 64-bit core. This should be available in the latter part of 2015, and available in devices in early 2016.

But that is the future, and today Qualcomm released their Q3 FY 2015 results. Revenue for the company was $5.8 billion, down 14% from the $6.8 billion a year ago. Operating income was down a staggering 40% to $1.2 billion, and net income was down 47% to $1.2 billion. Earnings per share fell 44% to $0.73, with Non-GAAP EPS of $0.99 which actually beat expectations slightly.

For a company which at one point seemed certain to become the dominant player in the ARM SoC space, these numbers hit pretty hard. Incorporated companies have a fiduciary duty to their shareholders, and Steve Mollenkoft, CEO of Qualcomm, today announced a major restructuring of the company which will see the company shed up to 15% of its workforce. It intends to save $1.1 billion annually through a series of targeted layoffs which will impact their temporary workforce, engineering, and reducing the number of offices. It is also reducing the annual share-based compensation by around $300 million. These cuts are expected to be complete by the end of fiscal year 2016, for a savings of $1.4 billion annually.

They will also be reviewing their corporate structure, capital return opportunities, and other alternatives with the goal of creating stockholder value. Qualcomm’s shares have fallen in price around 20% in the last year. They also have reaffirmed their commitment to return significant capital to shareholders, with a minimum of 75% of free cash flow being returned through dividends and share repurchases, in addition to the $10 billion stock repurchase program which was already underway. The board has also seen a shakeup, with two new members being added and they intend to appoint one additional independent director to the board. The company executives will also have additional return-based metrics for compensation.

Ultimately there is a lot of pressure on Qualcomm from some of its larger investors to split the company’s highly profitable licensing business and their riskier chip development business, and this is something Qualcomm will be evaluating. In good times the chip business contributes significantly to Qualcomm’s fortunes, but by its nature it’s not as regular or profitable as Qualcomm’s licensing efforts, and given the competitive landscape Qualcomm is in, investors are pushing a split as a means of allowing them to only invest in the licensing business and not be exposed to the chip business as well. Qualcomm for their part has stated that they are investigating this option, though whether it actually comes to pass remains to be seen.

All seems pretty rough for Qualcomm, but in the end they were still profitable, although not as profitable as they would like to be. MSM chip shipments were actually flat year-over-year with 225 million SoCs shipped. The initial 64-bit era has not been overly kind to Qualcomm though, and with their custom core being around six months away still, they have some work to do in the interim to avoid a repeat with the next SoC refresh.

Imagination Launches New Low Power Wireless IP: Ensigma Whisper

Today Imagination is launching a new set of licensable wireless intellectual property (IP) called ‘Ensigma Whisper’ to complement its portfolio of other SoC IPs. This announcement gives Imagination a more complete portfolio of large SoC IP blocks and notably differentiates Imagination from ARM who does not have a comparable wireless IP offering. Imagination claims the patented power optimizations makes Whisper the highest efficiency wireless IP available. 

Customers licensing Ensigma Whisper receive access to Imagination’s ‘Radio Processing Unit’ or RPU. This RPU is a complete set of IP from antenna to software, including all parts in between such as RF transceivers and baseband processing.

Imagination considers the Ensigma Whisper brand to be a collection of different wireless IPs, and is launching three models today. The C5300 is a Bluetooth LE (Low Energy) solution, C5400 is Wi-Fi 802.11n 1×1 and the C5401 is a combination model featuring both with separate paths enabling simultaneous operation. Here’s a gallery of the Imagination overview slides for each model.

Gallery: Imagination Ensigma Whisper BTLE and WiFi Models

Imagination plans to fill out the Whisper line with more protocols such as LTE CAT 0/1, 802.15.4 and 802.11ah. This will provide more mobility as well as mesh networking capabilities.

Imagination actually already had wireless IP in their portfolio via the high power Ensigma Explorer series, but to meet the stringent size, cost, and power requirements of SoCs targeted to IoT and wearable applications Enigma Whisper was a redesign from the ground up. During the press briefing we were given an opportunity to ask questions and this avenue yielded some interesting details.

While most of us know that devices tend to sleep more than they are awake, Chakra Parvathaneni, vice president of the Ensigma business operations at Imagination, provided some numbers sourced by profiling a variety of IoT and wearable devices. Chakra stated that for every 300ms of time, a typical IoT device is only awake 4ms. Furthermore, when a device is connected to a populated WiFi network, only 1 out of every 100 times RX packets are processed is there also TX activity. As a result Imagination focused its optimization efforts on sleep power and RX efficiency.

One of these optimizations is a patented technique called early packet abortion, which works in tandem with rapid sync convergence. Imagination’s internal data showed that on a populated Wi-Fi network a huge number of packets being synchronized to and decoded by a given device are actually for other devices. These are normally discarded but only after significant signal processing (and thus power). To prevent this waste, after decoding a packet actually intended for itself, Whisper saves metadata about the synchronization and decoding operations performed. In continued operation, as long as the connected access point does not change, Whisper uses this meta data to take short cuts in synchronizing and decoding future packets. This improves efficiency for self-addressed packets and allows early abortion of packets intended for other devices.

Other optimizations discussed by Chakra are that the Ensigma Whisper baseband was optimized to operate at 20 or 40 MHz frequencies (depending on wireless channel width) and use an 8-bit data path. Chakra mentioned this is a significant improvement over traditional designs that operate at 80 MHz and use a 10-bit data path.

The Imagination supplied data shown above gives the benefits of these optimizations. While we cannot do independent verification of this data yet, it is great to see continuous development in wireless power efficiency.

Finally, Imagination states that the embedded microcontroller of the Ensigma Whisper can be loaded with custom firmware to provide protocol layer 2 processing and even application level logic, eliminating the need for a paired general purpose CPU. If a general purpose CPU is needed, Imagination would love to sell you its MIPS CPUs, but stated Ensigma Whisper is compatible with almost any CPU type (including ARM).

On the software side, Imagination offers connectivity of devices to internet servers via their Flow Cloud stack. Flow Cloud provides features such as device and user management, data logging, event handling, asynchronous messaging, e-payments, and even internet radio.

Ensigma Whisper is available now for licensing, so we should see devices containing it later this year.