Snapdragon Summit Day 2 – Break Free

Smartphone obsolescence is no longer unthinkable.

• Day 2 doubled down on the notion that with a good agent, devices can break free of the smartphone, and with a dominant position in most of these other categories and surprisingly strong partner commitment, Qualcomm is extremely well positioned as the consumer electronics industry evolves.
• While it is clear to anyone who is paying attention that the agents being made available today still need a lot of work, the path ahead is becoming clearer.
• This is because when the agent demos being shown today have enough reliability, users will begin to use them because of the improvement in user experience that they offer.
• This was very similar to what happened in the early days of the smartphone when no one would even consider doing banking or share trading on a smartphone, and today, because it has become very reliable and much easier, it is ubiquitous.
• The typical workflow of arranging a meeting, booking the place and getting there on time often takes multiple apps and cumbersome cutting and pasting, which is a substandard user experience.
• If one can make one request to an agent, and the agent executes the workflow flawlessly (big if), then a significant improvement in the user experience will be offered, which users will adopt even if it does take a long time.
• This is why there is so much interest in the smart glasses space, and why Qualcomm spent so much time on it today, which was echoed by Meta at Meta Connect, which also took place on Wednesday.
• RFM has long identified that one of the superpowers conferred by the new generation of AI powered by LLMs is the ability to use voice as the man-machine interface.
• Put this together with a form factor such as glasses, where the user can just ask the agent to do something without having to take the phone out of his or her pocket, and this segment is going to get very interesting if or when it works properly.
• This has been the undercurrent of day 2, and Qualcomm’s ability to get partners to turn up in person to participate in Snapdragon Summit in the middle of the Pacific Ocean is a strong sign of commitment.
• A large proportion of the Google team that partners with Qualcomm are all on site, as are Snap!, Inspecs, Awear as well as a large group from Microsoft, which has launched some new Surface products here at the show.
• In many ways, this is more important than anything that the partners had to say because these non-smartphone device categories driven by AI agents are going to take some time to take off, meaning that when there are delays or disappointments, partners don’t just up and quit.
• Meta was not present at Summit, had no stand, demos, or video endorsements, but this was because Summit clashes with its own developer event that is being held over the next two days.
• At Meta Connect, Meta launched 4 devices across a range of form factors and use cases, all of which have one of Qualcomm’s XR platforms at their heart.
• When it comes to endorsements, this is pretty much as good as it gets, and so I am not concerned that the relationship between Meta and Qualcomm is falling apart.
• Hence, it is not an array of shiny new product announcements that is the theme of Summit, but seeing partners turning up, using the platforms and launching products based on them.
• Across all the presentations, the obsolescence of the smartphone was a quiet undercurrent that continued from yesterday.
• The ability to run 1-bit models and connect directly to the cloud all hint that if the agent becomes the main touchpoint for the user with his or her digital life, the smartphone will become less important.
• This is not going to happen this year or the year after that, but the possibility is there, and it is not going away.
• If this comes to pass, it will also not happen quickly, as it is important to remember that smartphones took 15 years from first appearing to become the ubiquitous tool in every consumer’s life.
• What one would expect to see would be a gradual increase in the use of the agent or agents or orchestrator or agents and less and less with apps and services directly.
• With its position across all consumer and (many enterprise) device categories, Qualcomm is in a good position to enable this and makes a good choice for the AI agent companies due to the commonalities that exist between its different silicon platforms.
• This means that Apple also has time to make the execrable Siri into something that people want to use as opposed to an annoying feature that one is forced to enable to use CarPlay.
• This is the risk that RFM Research identified in 2022, but it is being brought to life by AI as opposed to technological advances but fortunately for Apple, it still has plenty of time to fix it.