Qualcomm Inc. (NASDAQ:QCOM) recently announced that it is working with Alphabet Inc.’s (NASDAQ:GOOGL) subsidiary Google to develop and power Android Auto in-car solutions with its Snapdragon automotive processors. Notably, Qualcomm presently has two Snapdragon system-on-chips designed for the automobile market, namely, the 602A and 820A units.
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Snapdragon 602A was Qualcomm’s first automotive grade infotainment chipset, specially designed to meet stringent automotive industry standards while providing advanced smartphone-grade multimedia, connectivity, navigation, voice quality and control features in cars. Meanwhile, Snapdragon 820A is Qualcomm’s latest generation of automotive-grade system-on-chip, which drives infotainment and communication in vehicles.
With this collaboration, the companies aim to assist car manufacturers in building potent infotainment systems using Android as a common platform. This will make adding connected services and applications simpler, providing a safer and more in-built driving experience.
Interestingly, at the Google I/O conference, Qualcomm and Google will be exhibiting the Android in-car concept powered by Snapdragon 820A processor in the Sandbox. However, details regarding when Qualcomm-powered Android Auto devices will hit the market have not been revealed.
Meanwhile, this is not the first time that Google and Qualcomm have come together. Notably, Google is supporting Qualcomm’s endeavors in the server chip market by pledging to purchase some of Qualcomm’s chips if they attain the required performance metrics.
Being a leading name in the baseband chipset space, Qualcomm’s Snapdragon chips are used in Apple Inc.’s (NASDAQ:AAPL) iPhone, Alphabet-developed Android smartphones and Microsoft Corp.’s (NASDAQ:MSFT) Windows handsets.
However, of late, Qualcomm has been making attempts to foray beyond mobile phones. At the International Consumer Electronics Show (CES) in Las Vegas in January, the company revealed that it has entered into a partnership with German automobile manufacturer Volkswagen (DE:VOWG_p) AG’s subsidiary Audi. Per the collaboration, the automaker will be using Snapdragon 602A mobile processors in select 2017 model vehicles.
Amid stiff competition in the mobile phone chipset market and dwindling market share, we believe, it makes perfect sense for Qualcomm to look for new growth prospects outside the maturing mobile market.
The partnership with Google should help the company accelerate innovation in the auto space, creating the next generation of in-car experiences and establishing a new revenue stream.
Qualcomm currently has a Zacks Rank #3 (Hold).
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QUALCOMM INC (QCOM): Free Stock Analysis Report
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