Earlier this year, we told a room full of analysts that there were more than 120 Qualcomm Snapdragon All Mode smartphone designs launched, or in development, in China. 120 designs is a big number. Consider that just two years ago, this number was cumulatively less than ten. Such a high rate of adoption of any feature deserves closer attention. The adoption of All Mode by Chinese OEMs is remarkable not only for its rapid growth, but also for its broad implications for the global mobile ecosystem.
As with many mobile trends these days, this phenomenon begins in China, and can quickly become a global one. China is unique in having all seven major cellular modes actively deployed in the country: LTE TDD, LTE FDD, TD-SCDMA, WCDMA, GSM, 1X, and DO. Think back to the days when a quad-band GSM phone was the holy grail of handset design. That was one mode and four bands. Today, in order to reliably connect to more than one network in China, or to stay connected throughout the country, a device needs to support all seven modes and at least 13 cellular bands.
In order to help OEMs address band fragmentation and simplify the development of global and multi-regional devices, Qualcomm Technologies pioneered the All Mode platform, supporting all seven modes and over 40 cellular bands. The Qualcomm Reference Design, and innovative programs such as Qualcomm Global Pass with SIM-insert provisioning capability, are engineered to provide a powerful platform for cost-effective development and commercialization of global/multi-regional smartphones with leading, “future-ready” feature sets.
The need for region-specific or carrier-specific RF front-end configurations has been the primary reason for needing multiple device SKUs for different geographies or networks. In order for a device to support more bands, regions and carriers, more RF front-end content needs to be designed in, which typically translates into higher BOM (bill of materials) cost. But as we know, OEMs view any increase in BOM cost with a high degree of scrutiny, and rightly so. The Snapdragon All Mode platform, which is developed through chipset and RF front-end co-design, helps OEMs design smartphones that can serve multiple world regions with fewer hardware SKUs.
Consolidating to fewer design SKUs simplifies an OEM’s product portfolio, which in turn can simplify the supply chain, allowing several additional operational efficiencies and economies of scale that can offset the marginal increase in BOM cost needed for such consolidation. As band fragmentation increases on the road towards 5G, a simpler global SKU mix becomes increasingly compelling.
Now, this article would make for less interesting reading if we only discussed OEM cost savings and operational efficiencies. A recent white paper by Accenture Strategy, Evolution to the global device, elegantly describes how a transition towards more global devices can unlock new value for OEMs, carriers and retailers, and can change the mobile ecosystem in several important ways.
Let’s look at some of the notable strategic and economic benefits mentioned in the report:
- Benefit to OEMs/carriers: “[Future-ready and carrier-agnostic devices] will enable OEMs and carriers to either re-lease or re-sell refurbished phones for a higher residual value”
- Benefit to carriers: “A global device that can access all types and combinations of frequency bands would enable a carrier to match to more roaming partners and, therefore, offer more options and increase leverage during roaming agreement negotiations”
- Benefit to retailers: “Any device that would allow a retailer to stock one SKU that can be sold with any carrier’s plan would offer a tremendous value proposition to the retailer”
- Benefit to OEMs: “In addition to generating top-line growth, a global device will drive cost savings in the form of fewer required SKUs in an OEM’s portfolio”
While these value propositions have merit, it’s also worth noting that not all multimode/multiband devices are created equal. This is especially true for unlocked handsets. While carriers invest heavily in their networks to ensure a high quality user experience, it is known that the presence of unqualified, low quality handsets on a network, hampers the experience for all users. It’s analogous to having a clunker driving on a highway, spoiling the experience for everyone else, and reducing the highway’s overall capacity and efficiency.
Qualcomm Technologies continually invests in building a global capability for testing and qualifying reference designs and chipsets on multiple operator networks worldwide. This can help make the development of high performance global devices fast and cost-efficient, creating new value and strategic options for OEMs and carriers.
As the All Mode trend gains momentum it will be interesting to see how OEMs and carriers co-evolve to tap into some of the above value drivers, shaping the mobile world in new and interesting ways. It is even more interesting to consider how global multimode/multiband capability could potentially create value in segments beyond smartphones. A global IoT device? A global single-SKU module for connected cars? We look forward to these developments with great anticipation. Let’s see what the future brings … but then, Why Wait.