We try not to play at psychological analysis in our technology analysis, but we have to ask – Qualcomm, is everything ok? Because it definitely felt like something is not right.

Mobile World Congress is one of the company’s premier events to showcase their capabilities, but this year it did not feel like anyone at the company felt much like celebrating.

A few things stood out from the get go. Apparently, their investor relations team did not make the trip. We understand that a lot of investors skipped the show this year, but plenty still made it. At least enough to merit some IR participation.

Their booth is usually a hive of activity. A prime location in the heart of the show has always meant the Qualcomm booth is a good place to meet and so attracts a large crowd, but it felt empty this year. Nor can we blame people for not spending time in the booth – there was not much to see.

MWC is a place for Qualcomm to highlight its new technologies, especially the deeply esoteric ones that only matter to the deep telecom standards crowd who attend the show. There was none of that this year. Or at least nothing significant. Qualcomm usually puts out over a dozen press releases ahead of MWC, this year they had four.

The content in the booth was fairly anemic. About a third of the space was entirely empty. A big corner was dedicated to their automotive products, but there was nothing new on this front at the show. The most animated spot was the team from Humane demo’ing heir AI pin. A good example of Qualcomm technology at work, but what does it say when another company grans the spotlight in your own booth.

As mentioned above, the Qualcomm technical content was light. We actually could not find anyone in the booth capable of discussing the technical elements of their RF products. They just rolled out some interesting integated RF/Modem chips, but no one could actually hold a real conversation about them. The word “Afer Thought” seems to apply here.

This being 2024, they of course had an AI demo featuring a phone in airplane mode running stable diffusion. Fine, except we saw essentially the same demo six months ago. And just down the hall Mediatek had a much, much more compelling demo running Stable Diffusion in real time, while Qualcomm’s demo took 20 to 30 seconds to render.

Admittedly, most of this is qualitative and circumstantial, but we have been to enough of these shows to sense a disturbance in the force.

And there were plenty of more substantive problems

First, the company’s marketing effort seemed out of focus At CES, they talked about out cars, not PCs. Despite the launch of their CPUs just months prior, they had no PCs to display. Then at MWC, all they wanted to talk about was PCs. We attended an industry analyst briefing and a good two thirds of the discussion centered on PCs and AI. In fairness they talked a lot about work that they are doing with developers to build the software ecosystem around their Windows PCs. This is important and a big development for the company, but why are we talking about it at a telecom show. Are they going to focus on smartphones at Computex?

The company did have one significant mobile announcement at the show – a new initiative called “Gigabit for Everyone”, and here is where the company seemed to go from depressed to courting self-harm. At heart, this initiative boils down to low pried chips for $99 phones. As we often discuss, for years Qualcomm and Mediatek have existed in a stable competitive equilibrium. Qualcomm sells into high end phones, Mediatek sells into mid and low priced phones, leaving them to mostly compete for phones priced around $300 to $600. Qualcomm now seems to want to disrupt that, pitting them against not only Mediatek but also Unisoc who competes with Mediatek for the cheapest phones. The mere fact that we mention Unisoc and Qualcomm in the same sentence is a problem. Qualcomm has tried an failed many times to get into this market. Admittedly, this time the customer pool is much more concentrated which lightens Qualcomm’s support burden, a key stumbling block back when there were hundreds of customers down in this part of the market.

This strategy has two flaws. First, why pick a fight with Mediatek? That company has gotten a lot better, see above about AI, and so we have to imagine they might respond by giving Qualcomm a tougher run for their money in higher priced phones. Secondly, how much margin can Qualcomm really pick up down here? What would motivate such a move? We have to think that this implies Qualcomm is deeply concerned about its revenue prospects and is now scrounging around in the sofa cushions looking to pick up spare change.

All of this is frustrating because the people we speak with at the company are all working very hard. We do not want to imply that the rank and file are slacking off in any way. But we do now have serious questions about upper management. Where is their head at? It does not seem to be in mobile, the category also known as 80% of Qualcomm’s revenue.