Qualcomm: 40 manufacturers have built 170 phones using reference design program

Qualcomm Reference Design program gaining traction in China
Tools

Qualcomm (NASDAQ:QCOM) said that some of its OEM customers using its Qualcomm Reference Design (QRD) program to build devices are able to launch their gadgets in as little as 60 days from the time the project is launched to when the product is ready. Although the chipset giant's QRD program is focused primarily on companies based on China--customers include Lenovo, Yulong's Coolpad brand and Tianyu--Qualcomm said Tier 1 device makers are exploring the program for their lower-end handsets.

In an interview FierceWireless, Jeff Lorbeck, Qualcomm's senior vice president of product management, noted that the program was conceived in 2009 and launched its first product in 2011. The program does several things, all designed to speed up the time it takes to get a device off the ground. Software developers can connect with device makers through a "preferred vendor" list;  hardware component vendors can have their parts tested by Qualcomm to be included in the QRD program; and, perhaps most importantly, OEMs can select from available development platforms and obtain schematics, board layouts, documentation and tools to design a QRD-based device. Qualcomm also assigns engineers to assist each customer.

Qualcomm noted that that as of January, more than 40 manufacturers have commercialized more than 170 QRD-based devices. The vast majority of them--more than 90 percent--are based in China, though there are also OEMs using the program based in Brazil, India, Taiwan and Vietnam. "These customers needed a full, turnkey reference design," Lorbeck said. 

Lorbeck said Qualcomm customers can create derivatives of products in less than 60 days. "Years ago, it used to be a year or year and a half," he said.

Most of the devices being produced through QRD are low-end smartphones destined for the Chinese market. They run Qualcomm's Snapdragon 400 or 200 chipsets and generally sell for $150 unsubsidized or less. Lorbeck said this year Qualcomm will add support for China Mobile's TD-LTE network to the QRD program.

Lorbeck declined to say how much money Qualcomm's QRD program contributes to the company's bottom line. However, he said the operation "started out three years ago as a side business. It's been adopted by our core business, by our core teams."

Strategy Analytics analyst Sravan Kundojjala told FierceWireless that Qualcomm gets the majority of its revenue from branded vendors only. "We estimate that QRD accounted for about 5 percent of Qualcomm's total smartphone apps processor shipments in 2012. Qualcomm, however, [is] improving its efforts and the company's fourth-generation QRD is expected to improve its reach."

It's not surprising that Qualcomm is focusing the program on China. For example, Apple (NASDAQ:AAPL) CEO Tim Cook said earlier this year that he thinks China will eventually surpass the United States as Apple's largest market. Many analysts think China overtook the United States as the world's largest smartphone market last year.

Other chipsets firms, including Broadcom, Intel, Nvidia, MediaTek and Spreadtrum, offer reference design programs to promote their chips, according to Kundojjala. However, he said Spreadtrum and MediaTek are the only companies that rival Qualcomm's program in terms of scale. "We think the low-to-mid range smartphone market is driven by reference designs and it's very important for chip companies to participate in that market in order to gain volume share," Kundojjala said.

"I think it's absolutely necessary if they want to continue being a success in China," Forward Concepts analyst Will Strauss told FierceWireless, referring to Qualcomm. "They really held back. They were late to the party that MediaTek started. Now Qualcomm has wisely decided if you can't lick 'em, join 'em."

For more:
- see this Qualcomm blog post

Related Articles:
Report: Smartphones still have room to grow in Brazil, India and Russia
Broadcom targets 2014 as sweet spot for LTE smartphones
Intel sees Tizen as mobile growth opportunity
Nvidia unveils first integrated Tegra/LTE processor, the 4i
Qualcomm sees no slowdown in smartphone growth for 2013
MediaTek aims to raise smartphone chip profile in 2013