I still hold QCOM at 16.5x PE. Maybe this is a value trap but I continue to hold and do like their exposure to the satellite communication technology.
Qualcomm (QCOM) has significant exposure and is actively working on emerging satellite communication technology, which is being integrated into several of its chip designs, particularly under the Snapdragon Satellite umbrella.
Here is a summary of Qualcomm's efforts and partnerships in this space:
1. Chip Designs with Satellite Technology Exposure
Qualcomm is integrating satellite connectivity directly into its mobile and wearable platforms:
- Snapdragon Mobile Platforms (e.g., Snapdragon 8 Elite/Gen 2, X80 5G Modem-RF System): These platforms are designed to enable two-way satellite messaging for consumer devices like premium smartphones. This feature is often aimed at emergency services (SOS) as well as non-emergency messaging in areas with no traditional cellular coverage. The Samsung Galaxy S25 series, for instance, has been noted to support satellite connectivity for SMS via the Snapdragon 8 Elite processor, leveraging the revised Snapdragon Satellite program.
- Snapdragon Wearable Platforms (e.g., Snapdragon W5+ Gen 2): These chips, designed for smartwatches like the Google Pixel Watch 4, are the first in the wearable segment from Qualcomm to offer satellite SOS functionality by supporting Narrowband Non-Terrestrial Network (NB-NTN).
- IoT Modems (e.g., Qualcomm 212S Modem and 9205S Modem): These chipsets are specifically for industrial Internet of Things (IoT) use cases, enabling standalone satellite communication or hybrid connectivity for asset tracking and monitoring in remote areas. They adhere to the 3GPP Release 17 standards for Non-Terrestrial Networks (NTN).
In summary, Qualcomm is moving from its initial proprietary "Snapdragon Satellite" solution (in partnership with Iridium, which was ultimately cancelled for smartphones) to a strong focus on 3GPP-based Non-Terrestrial Network (NTN) standards. This standards-based approach is now being implemented in commercial products through partnerships with companies like Skylo and continuing collaboration with other industry leaders like Ericsson and Thales Alenia Space to build out the next generation of satellite-enabled devices.
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What about discussions w/ StarLink and/or Musk and his development in this emerging technology
The direct-to-device satellite connectivity market is highly competitive, and while Qualcomm and Starlink do not currently have an announced partnership for direct-to-device service, there have been discussions and competitive activity between them and their respective partners.
Here is a breakdown of the relationship and context:
1. No Active Direct-to-Device Partnership
- Qualcomm's Former Partnership: Qualcomm's major push into direct-to-device (D2D) satellite service was a partnership with Iridium Communications for Snapdragon Satellite. However, Qualcomm announced in late 2023 that it was ending this agreement, citing that smartphone makers preferred solutions based on open standards and the original proprietary model did not involve Mobile Network Operators (MNOs).
- Starlink's Key Partnership: Starlink's "Direct-to-Cell" service is built around a major partnership with T-Mobile in the U.S. and other mobile operators globally (like Rogers, Optus, etc.). Their approach is to use their satellites as "cell towers in space" that work with existing, unmodified LTE phones.
2. Prior Discussions Between Qualcomm and Starlink
- General Discussions: Before Qualcomm's partnership with Iridium ended, the chipmaker was reported to be in discussions with major satellite companies, including Elon Musk's Starlink, to explore integrating mobile satellite services into future Android devices. The goal was to develop solutions like narrow-band non-terrestrial networks (NTN).
- Historical Agreement: Qualcomm and SpaceX did reach an agreement years ago regarding spectrum use and interference for in-flight broadband services (Air-to-Ground Mobile Broadband), but this was for an older air-to-ground technology and not the current direct-to-device cellular market.
3. Starlink's Direct-to-Cell Development (The Competition)
Starlink, led by Elon Musk's SpaceX, is a major player and a direct competitor in the satellite-to-phone space.
- Technology: Starlink satellites with Direct-to-Cell capability have an eNodeB modem onboard that acts like a cellular base station, enabling connection with standard LTE phones without special hardware modifications.
- Rollout: The service began with texting in 2024, with plans to roll out voice and data in 2025.
- Musk's Strategy: Elon Musk has indicated that while the initial launch in the U.S. is exclusive to T-Mobile for the first year, Starlink ultimately hopes to serve all carriers globally.
In summary, while Qualcomm and Starlink have engaged in discussions and have a past agreement in another area, in the high-stakes world of direct-to-device satellite connectivity, they are primarily competitors at this time, each pursuing its own strategy and carrier partnerships. |
