Chicken Instead of Pheasant
Qualcomm is getting a lot of attention since implying a breakup with Samsung while explaining future earnings estimates in its Jan. 29 briefing on 2014 fourth quarter results.
In a statement, the world's number one application processor (AP) maker has lowered its earnings outlook due to “expectations that our Snapdragon 810 processor will not be in the upcoming design cycle of a large customer’s flagship device.”
Industry analysts are saying that these remarks indicate that Samsung gave up its plan to feature the Snapdragon 810 in the Galaxy S6. The Korean tech giant has been a major customer that primarily uses Snapdragon models in the Galaxy S series and represents 12 percent of Qualcomm's total sales a year.
Samsung is reportedly planning to use its own Exynos chips in the Galaxy S6, or Intel is likely to be one of its AP suppliers, instead of using the Snapdragon 810. So far, APs produced by Intel have never been featured in the Galaxy S series.
Meanwhile, Qualcomm stated its official position on the Snapdragon 810, which has been embroiled in an overheating controversy since late last year, saying that there is no problem with the product.
“The Snapdragon 810 processor performs well. We mass produced and shipped the AP to customers, and it was already used in more than 60 products,” said Alex Katouzian, senior vice president of product management at Qualcomm, on Jan. 29. He added that he anticipates that the launch of the G Flex 2, which used the controversial chips, will bring another innovation in the premium smartphone market.
Qualcomm's move can be interpreted as a measure to consider the possibility that the controversy could have a negative impact on LG Electronics, stemming from increasing reports about Samsung's decision not to use Qualcomm's chips in the Galaxy S6.
Qualcomm, however, did not mention the overheating problem, only saying that there is no problem with product performance. An industry source remarked, “As far as I know, Qualcomm expressed its official position to its Korean branch, as the overheating controversy has snowballed in Korea.”
In the meantime, LG held a launch event for the G Flex 2 in its headquarters on Jan. 22, advocating the controversial chip.
Choi Yong-soo, managing director at LG, said, “The Snapdragon 810 satisfies our standards.” He also stressed, “The processing speed of the chip is fast, and it does not overheat.” He continued by saying, “The level of overheating is not determined by the CPU of the phone alone.” He explained, “The product's cooling design or CPU optimization also decides the level of overheating or product performance.” He added that the G Flex 2 scored high marks in benchmarking tests.