One ‘Very Large’ Smartphone OEM Won't Launch 5G Until 2020, Says Qualcomm CFO

Qualcomm regards 2019 and 2020 as likely “building years” for 5G smartphones as a prelude to the market reaching “scale” in 2021, said Chief Financial Officer George Davis at a Citi investors conference Wednesday. Every major smartphone OEM will have “rolled over to 5G” by 2021, he said. That Qualcomm knows of one “very large OEM” customer that plans no 5G smartphone launch in 2019 leads the company to believe that the market won’t be “ready for scale” until 2020 or later, he said. The componentry that Qualcomm markets for 4G smartphones “has an integrated modem,” he said. “Everything is very efficient and uber-effective” and is a “great value proposition for the supply chain,” he said. “You’ll have all that” with 5G, but not until 2021, he said. That will give Qualcomm at least a year and a half for the “debugging of everything,” learning all the “pain points that come with any generation change,” he said. It’s not easy to compare the predicted 5G ramp with the launch of 4G six years ago, said Davis. Average selling prices (ASPs) of the componentry that will go into a 5G smartphone will go up because those devices “are more complex,” he said. “They're bigger. They provide more functionality. So, that's a positive.” With the 5G ramp, “you won't have the same degree of unit growth behind it” as the industry had with the 4G launch, because the smartphone market is more mature and can’t support that same “sheer growth,” he said. Nevertheless, “from our standpoint, it's a very important time for improving share and improving ASPs and I think that's really what plays out over the over the next few years,” he said.