Qualcomm announced it will be manufacturing analog radio frequency chips, and the people who know what that means started freaking out.
Qualcomm is the company behind the part of almost every modern cellphone that handles its wireless data transfers. But those digital chips had limitations, especially following the introduction of 4G LTE broadcasting technology, and that made them hard to use across the globe’s varying broadcast environments.
The new RF chips would be able to handle those difficulties, allowing users to traverse the globe with one device: Phone manufacturers could make one phone that could be sold anywhere.
Not only that, but the new RF chips are smaller, faster and run cooler, while requiring less power.
“We are solving a pretty fundamental problem for the industry,” Murthy Renduchintala, executive vice president of Qualcomm’s chip unit and co-president of mobile and computing business, said, according to a WSJ.com blog.
The new chips, dubbed RF360, took Qualcomm several years of research and development. Now that they are ready, other companies that have already been producing RF chips are not sure they can take Qualcomm on. Or at least their investors appear to have some doubts.
According to the WSJ.com blog, analyst Tavis McCourt called Qualcomm’s Thursday RF chip announcement a “bombshell," while downgrading his ratings of numerous competing companies.
Following Qualcomm’s Thursday announcement, stocks in three different RF chip companies fell between seven and 15 percent.
Industry analyst Michael Thelander already published an 11-page report explaining his thoughts on the implications of the announcement, including the acknowledgement that, if played right, this move gives Qualcomm a strong foothold in a multi-billion dollar market.
“It’s a huge business opportunity,” he said.
The announcement comes just in time for this week’s massive international Mobile World Congress in Barcelona, where even among the din of showrooms, booths and other big announcements, Qualcomm is sure to turn some heads.
