Pick up any Android phone at your local store, assuming you live in Europe or the United States, and there’s an incredibly high probability that there’s a Qualcomm chip under the hood. The company was one of the first to realize handset makers don’t want to deal with all the work involved in getting a CPU, GPU, and modem to talk to each other, so Snapdragon was born. But there’s a slight problem. Over in Asia, China specifically, local chip makers are making “good enough” products at prices that Qualcomm simply can not match.
So what happens when you’re a publicly listed company that needs to show shareholders that revenues are growing, but you’re experiencing a little bit of pain in the Far East? You let people go. According to GigaOM, Qualcomm is trimming the fat at the executive level. People who’ve been promoted just for showing up all these years and not stirring up any trouble will be shown the door. Roughly 100 of such people will have to go somewhere else, though that number isn’t concrete. For some perspective, Qualcomm has something like 31,000 employees total.
Can Qualcomm capture China? I want to answer that question with another question: Should Qualcomm even bother? The way Qualcomm’s business model is structured, they get a small piece of the final selling price of a mobile phone. So they could either get a small piece of a smaller number of expensive phones or an even smaller piece of a huge number of cheap phones. Trying to get both just looks greedy, doesn’t it?