Qualcomm Incorporated QCOM has set a new benchmark for itself as it unveiled a game-changing 5G chipset for low-cost smartphones for the masses. The Snapdragon 690 5G chipset is the first SoC (System-on-Chip) in the 600 series to support 5G services at accessible price points. This is likely to usher in more affordable 5G Android mobile handsets, with a plethora of unique features in its category, by the second half of the year.
Built on Samsung’s 8nm fabrication process, the Snapdragon 690 is an octa-core CPU, featuring a 2+6 CPU core configuration. The two big cores are the Kryo 560 cores while the remaining six little cores are ARM Cortex-A55 cores. Compared to its predecessor Snapdragon 675, the new chip is billed to offer up to 20% better CPU and up to 60% faster graphics performance.
The chip has an integrated Snapdragon X51 5G modem that supports global 5G standards with multi-SIM functionality and dynamic spectrum sharing. It supports a download speed of up to 2.5Gbps and upload speed of up to 660Mbps. In addition, the chipset has a new AI engine called ARCSOFT that features a Hexagon Tensor Accelerator for enhanced performance in real-time Snapchat filters and smooth transition when switching between ultrawide, wide and telephoto cameras.
The chipset also significantly improves multimedia performance with the ability to record in HDR10 format for FHD+ displays with a 120Hz refresh rate and support for 4K video recording at 30fps and stills up to 192MP. Furthermore, the chip boasts a new enhancement for video encoding and supports faster charging with Quick Charge 4+. Leveraging the FastConnect 6200 system that brings Wi-Fi 6, Bluetooth 5.1 and 2x2 MU-MIMO configurations, the Snapdragon 690 is arguably the most powerful SoC yet in the lower mid-range segment.
Several manufacturers such as HMD Global, LG, Motorola, Sharp, TCL and Wingtech have reportedly shown interest to launch phones with this 5G chipset in the second half of the year. These 5G devices are likely to retail within $300 and $500, making them an enticing buying option for the masses.
Qualcomm is one of the largest manufacturers of wireless chipset based on baseband technology. The company is focusing on retaining its leadership in 5G, chipset market and mobile connectivity with several technological achievements and innovative product launches. With more than 150 5G design wins, Qualcomm is reportedly the only chipset vendor with 5G system level solutions covering both sub-6, gigahertz and millimeter wave bands.
For calendar year 2020, Qualcomm estimates sales of 175-225 million of 5G handset units. The company anticipates witnessing two inflection points in fiscal 2020. The first inflection point realized during the fiscal first quarter is likely to continue in the first half of fiscal 2020 with continued strength and acceleration of 5G demand. The next inflection point is anticipated to be realized in the fiscal fourth quarter with the launch of additional 5G flagship handsets and is likely to extend to fiscal 2021.
With diligent execution of operations, the stock has gained 24.4% over the past year compared with the industry’s growth of 2.1%.
We remain impressed with the inherent growth potential of this Zacks Rank #3 (Hold) stock. Some better-ranked stocks in the industry are InterDigital, Inc. IDCC, Ericsson ERIC and Juniper Networks, Inc. JNPR. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
InterDigital has a long-term earnings growth expectation of 15%. It delivered a positive earnings surprise of 99.5%, on average, in the trailing four quarters.
Ericsson has a long-term earnings growth expectation of 25.9%.
Juniper has a long-term earnings growth expectation of 7.3%.
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