At the Consumer Electronics Show (CES), Qualcomm Inc. (NASDAQ:QCOM) was one of the many tech companies that spoke about a planned involvement in ‘smarter’ cars.
The show was host to many launches and announcements related to the auto industry, with special focus on connected and autonomous vehicles. The new automotive chips unveiled by Qualcomm will go a long way in helping it diversify its top-line, and move away from being limited to smartphones and tablets.
The Snapdragon 820 is a chip is designed to power the infotainment system in cars, and is the center-point of the company’s connected car strategy. Qualcomm claims the chip uses up to 60% less power than generic 64-bit chips, and offers up to 85% better performance. The Snapdragon 820-Am is the second generation of the 820, which can support peak download speeds of up to 600 Mbps, thanks to an X12 modem added to the first generation chipset.
One company that will be closely be following Qualcomm initiatives is Nvidia (NASDAQ:NVDA). The latter has its own set of Tegra SoCs that are now aimed at powering connected vehicles, after garnering a dismal response in the tablets and smartphone market. Although overall revenue for the Tegra unit in the first quarter fell by 23% to $129 million, owing to a drastic fall in smartphone and tablet sales, Nvidia’s non-GAAP revenue for the unit was recorded at $79 million, a 51% improvement over last year.
Nvidia-powered digital cockpits were also showcased in concept cars by Mercedes Benz, Porsche, Audi, Bentley, and others, at the Frankfurt Auto Show. The infotainment systems of the new Tesla Model S and Model X are also powered by Nvidia’s Tegra processors. Nvidia’s newly developed Drive PX is another product that the company is banking on to, tap carve a place for itself in the autonomous car market.
Both chipmakers will also have to be mindful of Intel Corporation (NASDAQ:INTC), which, in partnership with Jaguar Land Rover, unveiled an F Pace SUV with connectivity features that demonstrated the synchronization of smart home features, with the car’s infotainment system.
These features could turn into a market worth $46.7 billion. Several research firms suggest that the global connected vehicle market which includes telematics, smartphone integration platforms, and connectivity, could achieve a compound growth rate of 10.8% annually, between 2014 to 2020.
Small chipmakers focusing on the saturated smartphones and tablet chips market could soon see themselves being outpaced by the likes of Intel, Nvidia and Qualcomm.
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