Intelligence Brief: Is Snapdragon 888 a marketing exercise?

Full confession: I have never been to Qualcomm’s Snapdragon Tech Summit. Sure, I am attending the virtual version this year, but I never made it out to the in-person, real world, on the beach in Hawaii version. I’ve been invited. But something always got in the way.

I’m regretting that, more than ever, this year. In part because any trip beyond my local grocery store now feels like the adventure of a lifetime and, in part because this is the first Snapdragon Summit taking place against the backdrop of full-on 5G commercialisation. While 5G networks were up and running in 2019 and services were being sold, by the end of the year were just shy of 13 million 5G connections, less than 1 per cent the number of 2G connections. (Remember 2G?)

This year, we expect more than 230 million connections [1]. That’s a big number. Combined with the more than 100 operators and in excess of 150 device models supporting the technology, it highlights 5G is now a very real, mass-market technology. So, of course, we were all expecting something big at the 2020 Snapdragon Tech Summit.

And what did we get?

We got the Snapdragon 888 [2], the latest iteration of Qualcomm’s flagship application processor family. The fact there would be a new top-end Snapdragon offer was a given. And, to be completely fair, some of the advancements were (broadly) predictable based on market and technology trends. A new 5nm architecture, for more efficient performance. An upgraded AI processor and capabilities (nearly two-times the operations per second), playing to Qualcomm’s R&D in the space and the importance of AI in an increasing number of everyday applications. Upgraded CPU and GPU components, further boosting performance. A new imaging processor, because all phones are cameras and image quality resonates with consumers. The integration of Qualcomm’s X60 modem, something the vendor has been criticised for not doing in the past.

There’s a lot to dig into here and a whole lot to like. Who doesn’t like faster, better, and more power efficient? But, rather than talk about features (which plenty of other folks will do), I’d like to look at the marketing of the new processor. Why? Because it tells us something about the market, and Qualcomm’s place within it.

Snapdragon 875 versus 888. Snapdragon 845 begat the Snapdragon 855, which begat the Snapdragon 865. You’d be forgiven, then, for expecting a Snapdragon 875 this year. Naturally, the significance of the number 888 in Chinese culture is at play here. Media, analysts and other market pundits have already weighed-in on possible explanations: a geo-political olive branch against the backdrop of painful trade wars, a nod to Qualcomm’s Chinese OEM partners, a hopeful designation. These, largely, ignore one of the biggest 5G dynamics of 2020: Chinese consumers have driven 5G adoption faster than many people expected and lower-cost 5G devices have been a key driver. In 2021, as 5G momentum picks up, Chinese consumers will have access to even more affordable devices, though, all else being equal, Qualcomm and its OEM partners would rather they went premium. How to incentivise that behaviour? Give those premium devices an application processor with massive cultural significance. Make the choice between a 768-powered device and an 888-powered device a truly emotional decision. Qualcomm’s change in Snapdragon naming convention is about more than trade wars or success aspirations. It’s about recognising the role of China in driving global 5G volumes and guarding against the potential erosion in device pricing.
A Careful Balancing Act. Recall the potential erosion in device pricing I mentioned? Like just a few lines ago? Well, Qualcomm knows about it and has enabled it by offering multiple tiers of Snapdragon processors. The flagship 8-series. The 7-series supporting what the vendor calls “in-demand premium features.” The 6-series, “designed for performance efficiency and versatility.”  The 4-series, “designed to support the most popular smartphone and IoT features.” All will support 5G in 2021. Taken as a whole, they allow OEMs and operators to put 5G in the hands of more people, not just those who can afford top-tier devices. That’s a good thing. A very good thing. It also means that Qualcomm and partners need to carefully explain the benefits of going premium, without discounting the value of lower-end chipsets and devices. Every operator and device maker understands this dynamic. And, where the Snapdragon Summit’s opening keynote referenced the importance of “premium experiences” multiple times, this is clearly top of mind for Qualcomm. It might not be a new challenge, but the democratisation of 5G devices combined with operator interests in monetising new 5G use cases makes this a particularly relevant challenge in 2021.

If you are still considering the titular question (whether or not the Snapdragon 888 is a marketing exercise), the answer is yes: it was always going to be. Any new commercial effort (from any company), will be one part marketing and one part product.

The distinction here is we are not talking about any old product. We are talking about a product which will power some of the most powerful 5G smartphones in 2021. It is also a product from one of the market’s most adept marketers: Qualcomm has mastered the art of tying the progress of the mobile industry (and standards) to its own R&D while weaving in a broader context around consumer demand, supply chain, and political evolutions. Think one part pragmatism, one part tight-rope walk, or a game of four-dimensional chess for those of us who perennially lose at checkers/draughts.

What we get, then, with the Snapdragon 888 launch is more than just marketing or product innovation. We get an encapsulation of myriad market drivers, demands and dynamics, a miniature (5nm to be exact) representation of the mobile ecosystem circa 2021 and a reminder of why I need to find the time to get to Hawaii next year.

– Peter Jarich – head of GSMA Intelligence

The editorial views expressed in this article are solely those of the author and will not necessarily reflect the views of the GSMA, its Members or Associate Members.

[1] https://data.gsmaintelligence.com/research/research/research-2020/global-5g-landscape-q3-2020
[2] https://www.mobileworldlive.com/featured-content/top-three/qualcomm-specs-up-snapdragon