Qualcomm (QCOM +1.29%) has launched a new version of its Snapdragon processor, called the Snapdragon 8 Elite, which was unveiled this week. For this, the company is bringing the technology that was initially developed for its laptop chips to mobile phone chips.
The San Diego-headquartered company, which is known for creating semiconductors, software, and services related to wireless technology, first hired a group of former Apple engineers in 2021 to help design its laptop chips in an attempt to expand its business. These chips went on sale this year.
This Snapdragon X Elite Platform is specially built for AI and, according to Qualcomm, is the most intelligent and efficient processor for Windows in its class.
Now, the same tech is being brought to mobile devices in order to enhance their AI capabilities and give them laptop-level proficiency. For this, Qualcomm has also reworked the parts of the chip so that it can handle tasks like generating text and images.
Qualcomm will be offering software developers special tools to tap into those parts of the chip.
“AI has been one of those where I think Google is moving fast, but we have our own technology to offer that end developer.”
– Chris Patrick, Qualcomm’s senior vice president and general manager for mobile handsets
The latest Snapdragon processors come with some great capabilities, promising 45% faster speeds while consuming less energy than their predecessors. It also packs a new Hexagon neural processing unit (NPU) that will particularly boost AI performance, enabling faster and more efficient task execution.
In an interview with Bloomberg Television earlier this week, Cristiano Amon, President and CEO of Qualcomm Incorporated, said mobile phones handling AI right on the device will become a common thing in the next few years. He said:
“Over the next five years, we are probably going to have — all of us — an AI smartphone.”
The problem, according to him, will be waiting for use cases. This, however, isn’t anything unique and happened during the transition to smartphones as well.
According to International Data Corporation (IDC), generative AI (GenAI) smartphones are projected to grow as much as 363.6% year over year in 2024 to 234.2 million units. These numbers are further expected to reach nearly a billion globally in another four years, reflecting a CAGR of 78.4% from 2024 to 2028.
“The rapid incorporation of GenAI in smartphones is unprecedented in mobile history, with market penetration expected to exceed 60% within the first three years.”
– Nabila Popal, senior research director at IDC
Qualcomm, which is a major player in the Android processor field, has already onboarded Samsung, Xiaomi, OnePlus, Oppo, Vivo, Realme, iQOO, Honor, and Asus, among several others, to use its new chip.
A Deeper Look into Snapdragon 8 Elite
Source: Qualcomm
The official announcement came from Qualcomm Technologies on Oct. 22 at the Snapdragon Summit, where it unveiled the world’s fastest mobile system-on-a-chip (SoC) ever.
The Snapdragon 8 Elite comes with the 2nd generation Qualcomm Oryon CPU. After debuting Qualcomm Oryon in PCs earlier this year to offer unrivaled battery life and remarkable experiences, Patrick shared the excitement of bringing the second generation of Oryon CPUs into smartphones. According to Patrick:
“It’s a major leap forward and we expect consumers to be thrilled with the new experiences enabled by our CPU technology.”
Qualcomm Oryon is a set of custom computing technologies that are built on 64-bit architecture and 4 nm process technology of Taiwan Semiconductor Manufacturing Company (TSMC). It actually claims to offer up to 51% faster CPU compared to the Intel Core Ultra 9 and 28% faster than the Apple M3.
The Oryon CPU with a custom eight-core structure consists of 2x prime cores with speed clocked at 4.32 GHz. Meanwhile, 6x performance units are working at up to 3.53 GHz. The CPU is paired with an industry-leading 24MB L2 cache while supporting 5,300MHz LPDDR5X RAM.
With its Oryon CPU, Qualcomm aims to usher in the next generation of smartphones that allow for effective multitasking and ultra-responsive gaming.
On the graphics front, Qualcomm debuted its revamped Adreno GPU, while the new Hexagon NPU is for the AI side. All these technologies combined together enable the Snapdragon 8 Elite to offer significant performance improvements.
The GPU’s newly sliced architecture not only helps achieve enhanced performance of up to 40% but also system-wide power savings of 27%, in addition to improved ray-tracing performance.
Hexagon NPU meanwhile powers Qualcomm’s AI Engine for better performance per watt plus multimodal Gen AI support and longer token inputs. Wide support for small and large multimodal models comes with the ability to run as many as 70 tokens on SLMs.
These innovations, Qualcomm explains, empower its chip to make on-device multi-modal generative AI applications a reality on smartphones. Its new chip is also the first mobile SoC to offer support for Unreal Engine 5.3 and the Nanite virtualized geometry system.
By enabling the understanding of speech, context, and images, and even seeing what the user sees via camera live view, it will enhance productivity and creativity while prioritizing user privacy. This way, the Snapdragon 8 Elite will help Qualcomm revolutionize mobile experiences by offering personalized AI services.
In addition to it all, the Snapdragon 8 Elite features enhanced image signal processing (ISP) and chip-level photo and video semantic segmentation. Furthermore, with the Snapdragon X80 5G modem, which is paired with FastConnect 7900 Mobile Connectivity System, Qualcomm claims peak downloads rated at 10 Gbps and a maximum upload of 3.5 Gbps.
Apple’s A18 Pro: A Closer Look at the Competition
Now, how does Qualcomm’s latest chip compare to the world’s largest company by market cap, Apple (AAPL +0.36%)? Well, for that, first, let’s look into its chips.
For some time, Apple has been using its own chips in the iPhones and iPads while the Macs have fully transitioned away from Intel chips. Now, all of its products have their very own chips made in-house.
The top offering from Apple is A18 Pro, which is used in the latest iPhone 16 Pro and is expected to be used in future iPads, is the fastest. It has one additional GPU core than A18, which is in the iPhone 16.
The Apple A18 and A18 Pro are a pair of 64-bit ARM-based systems on a chip custom-designed by Apple. It is built on a 2nd generation 3 nm process by TSMC, which offers high density and efficiency. When it comes to core setup, it has a 6-core GPU and a new 6-core CPU with a maximum clock speed of 4.04 GHz.
Hardware-accelerated ray tracing’s speed has gone up 2x, allowing for even more realistic light sources and reflections while making game controllers and other wireless accessories highly responsive.
The new A18 Pro chip from Apple features a new architecture with smaller, faster transistors that allow it to offer enhanced efficiency. The new 16-core Neural Engine is also faster and more efficient than the previous ones. Next-gen machine learning accelerators have been further refined for Apple Intelligence by running high-efficiency and low-latency computations on the CPU without engaging the Neural Engine.
For its Macbooks, Apple has a M-series chip. Its latest M3 lineup, which involves M3, M3 Pro, and M3 Max, was released in late 2023 to deliver enhanced performance and reveal new capabilities of its PCs.
In its official announcement, Apple noted that these were the first PC chips built with 3 nm process technology, which allowed more transistors to be packed into a smaller space, hence improving speed and efficiency.
The M3 chips family features a next-gen GPU that is faster and more efficient, introducing a new technology called Dynamic Caching. This technology allocates local memory in hardware in real-time, ensuring each task uses only the memory it actually needs. This improves GPU utilization, which, in turn, enhances performance for demanding apps and games.
Moreover, rendering speeds have become up to 2.5x faster than the M1 family. Meanwhile, the CPU performance cores and efficiency cores are 30% and 50% faster than those in M1.
“Apple silicon has completely redefined the Mac experience. Every aspect of its architecture is designed for performance and power efficiency.”
– Johny Srouji, the company’s senior vice president of Hardware Technologies at the time
Now, Apple is expected to make a further upgrade to its Mac lineup with the introduction of the highly anticipated M4 chips, which was introduced in May this year.
M4 is a SoC that is built using 2nd gen 3-nanometer technology. The new CPU has up to 10 cores, while the new 10-core GPU builds on the next-gen GPU architecture introduced in M3. Its Neural Engine, as per Apple, can perform as many as 38 trillion operations per second, making it “faster than the neural processing unit of any AI PC today.”
Financial Comparison: Qualcomm vs. Apple
Now, let’s take a look at the financials of both companies to get a better look at their investing potential.
1. Qualcomm (QCOM +1.29%)
One of the world’s largest players in the smartphone processor sector has a market cap of $185.59 billion. With that, the shares of the company are currently trading at $167.30, up 15.19% year-to-date (YTD). It has an EPS (TTM) of 7.81, a P/E (TTM) of 21.32, and a dividend yield of 2.04%.
QUALCOMM Incorporated (QCOM +1.29%)
For the third quarter of its fiscal year, which ended in June 2024, Qualcomm reported total revenue of $8.44 billion. Its QCT division contributed $6.79 bln in revenue, with mobile handsets accounting for $4.54 bln, RF front-end for $1.04 bln, automotive for $460 mln, and IoT for $750 mln.
Its net income was $1.69 billion, while cash flow from operations came in at $2.6 billion, and $1.3 billion was returned to shareholders through dividends and share repurchases. All this reflects “strong execution of our growth and diversification strategy, with QCT quarterly revenues and EBT margins at the high end of guidance,” said CEO Amon while sharing excitement about the launch of Snapdragon X Series solutions for PCs that provide enhanced power efficiency, high performance, and personalized AI experiences.
Now, this week, besides the Snapdragon 8 Elite launch, Qualcomm has been reported to have received a 60-day notice of the architectural license agreement cancellation from chip designer Arm ((ARM +1.92%). The license allows Qualcomm to design chips based on the architecture of the British semiconductor, which is majority-owned by Japanese giant SoftBank.
Arm operates by licensing blueprints that other companies use to design semiconductors, and it has been alleged that Qualcomm has broken its license agreement. The chip designer is “fully prepared for the trial in December” and is confident that the Court will rule in its favor.
While Arm says its license agreement has been breached repeatedly, which has left it no choice but to take formal action to protect its ecosystem and partners, Qualcomm argues that Arm’s “desperate ploy” is simply to “strong-arm a longtime partner.” Qualcomm is also confident that its rights will be affirmed under its agreement with Arm.
This legal battle between the two has been going on for two years now after Qualcomm acquired Nuvia in 2021, and as per Arm, Qualcomm should now renegotiate licensing terms with it.
Amidst this, Qualcomm has been ramping up its efforts in designing PC processors to run AI applications. The cancellation of the license would mean Qualcomm may have to stop selling products based on Arm designs.
Qualcomm’s AI focus, meanwhile, isn’t limited to just smartphones. It is actually working with Google to bring AI to cars. According to the company, its Snapdragon Digital Chassis, chipset, and associated technologies will be paired with Google’s Android Automotive OS to form the basis of a “digital cockpit” using gen AI.
This will provide “intuitive voice assistants, immersive map experiences, and real-time updates to anticipate driver needs,” with China’s Li Auto and Mercedes Benz being the first ones to use the technology in their future cars.
2. Apple (AAPL +0.36%)
This tech giant has a market cap of $3.53 trillion, which makes it the world’s largest company, as its shares are currently trading at $231.38, up 19.86% this year. It has an EPS (TTM) of 6.57, a P/E (TTM) of 35.13, and a dividend yield of 0.43%.
For the quarter ending June 30, 2024, the company reported $85.8 billion in revenue, an increase of 5% year-over-year. Of this revenue, $39.3 bln was from iPhones, $7bln from Mac, and $7.16 bln from iPad segments. Revenue from wearables, home, and accessories came in at $8.10 billion, while services revenue was $24.21 billion.
Meanwhile, Apple’s net income was $21.45bln, and its operating cash flow was nearly $29 billion, which allowed it to return more than $32 bln to its shareholders.
The company’s active devices base during this period reached a new all-time high in all geographic segments. Apple CFO Luca Maestri attributed this to “very high levels of customer satisfaction and loyalty.” Back in Feb., the company reported 2.2 billion active devices.
During this quarter, the company also announced Apple Intelligence, which its CEO Tim Cook described as “a breakthrough personal intelligence system that puts powerful, private generative AI models at the core of iPhone, iPad, and Mac.” At the time, Cook said that they had boosted their spending to get Apple Intelligence ready and would be shipping this service to customers in the fall.
With that, iOS 18.1 is all set to introduce the Apple Intelligence features for iPhone 16, but not all the features will be available in this update right away; they will be rolled out through next year.
Now, these features will include Genmoji to find the ideal emoji for a text situation, Image Wand to generate a full-fledged image from a rough sketch, priority notifications, auto mail sorting, writing assistance, improvements to the Photos app, and a new version of Siri with on-screen awareness and the ability to take in-app actions.
While Apple is ready with its AI, internal research suggests the tech giant has a long way to go with OpenAI’s ChatGPT outperforming its voice assistant, Siri, by a notable margin. It is believed that the company’s gen AI tech may be currently two years behind industry leaders.
Conclusion
The Snapdragon 8 Elite marks a new era of smartphone processors, representing a significant leap in mobile technology that brings AI-powered capabilities to mobile devices and pushes the boundaries of what our smartphones can achieve.
With this new chip, Qualcomm has focused on integrating laptop-grade performance with efficient power consumption, setting a new standard for mobile processors. With leading smartphone brands onboard, Snapdragon 8 Elite is all set to dominate the Android market.
While Apple has been elevating its device ecosystem with its very own chip advancements, Qualcomm’s Snapdragon 8 Elite still offers fierce competition with its next-generation AI and performance capabilities despite its ongoing legal challenges with Arm. As Apple lags in its AI capabilities, Qualcomm’s expansion into mobile can help it position itself as a critical player in the evolving tech landscape and AI future.
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