Daniel Eran Dilger: Qualcomm is playing catch-up to Apple

From Roughly Drafted: Qualcomm’s Snapdragon 855 is over a year behind Apple’s A12 Bionic, lacks a premium Android audience, posted Tuesday:

It was embarrassing for Qualcomm when Apple released its 64-bit A7 back in 2013. It was just as humiliating that Apple was able to deliver its A12 Bionic as a 7nm Application Processor this fall. Qualcomm is still only just talking about its first 7nm chip as it’s readied for sale. Qualcomm has been making mobile processors long before Apple. How is it getting so outgunned?

A big part of it is that Apple can fund the development of advanced technology because it is selling over 200 million high-end phones every year. This year, Apple reached average selling prices of nearly $800. Qualcomm services a handful of high-end Androids, but these sell in far lower quantities.

All of the concerns popularized as reasons Apple might soon be in trouble—consumers balking at higher prices, a longer retention cycle on consumer phones, and fewer remaining sources of entirely new demand for smartphones—are also impacting Android makers. Samsung’s phone sales are down dramatically, with high-end models getting hit the hardest.

That’s terrible news for chipmakers like Qualcomm who specialize in building advanced technology aimed at premium devices. However, on top of all that a variety of phone makers are increasingly following Apple in investing in designing and building their own Application Processors and even their own modems. [more]

My take: I don’t know much about silicon. Ben Bajarin, who does, was impressed by the 855. But Dilger is right about this: It’s not easy these days to make money selling high-end Androids.