Defending Qualcomm’s Use of ARM’s Cortex A57/A53

Qualcomm has faced some undue criticism for choosing to use ARM CPU IP for its latest Snapdragon processors.

Jun 1, 2014 at 12:00PM

I'm seeing a whole lot of criticism of Qualcomm (NASDAQ:QCOM) these days for choosing to use ARM's (NASDAQ:ARMH) "off-the-shelf" CPU cores for its initial 64-bit lineup. Some will claim that Qualcomm has "given up" trying to compete on performance, or that the company is failing to differentiate -- blah, blah, blah. While I understand these comments, critics seem to be missing the forest for the trees here.

A mobile chip is more than a CPU
Qualcomm sells complete wireless platforms. This includes an applications processor (which features many unique IP blocks such as CPU, graphics, image signal processor, and so on), a cellular modem (which Qualcomm in many cases integrates into its applications processor), connectivity, and all of the attendant software/drivers. These are very complex devices, and the commercial success or failure of a given part isn't driven solely (or even primarily) by CPU performance.

Qualcomm is still doing its own 64-bit CPU, but who cares?
In its initial press release for the Snapdragon 808 and 810 (which are the chips with the ARM cores), Qualcomm was quick to point out that it was still working on a custom, in-house 64-bit CPU. That's great, wonderful, and dandy, but who really cares? Qualcomm's implementation of ARM's CPU cores in its lower-end/high-volume parts has typically been very good, and I'm sure the company's physical design teams will do a great job implementing the Cortex A57.

Of course Qualcomm wants to tout its own custom CPU cores -- they're a nice marketing feature for the few technology fans who care. But at the end of the day, a user is likely to notice the impact from a more capable image signal processor (pictures and video), better connectivity/cellular (surfing the Web and downloading apps), and even graphics processor (games). If ARM's CPU cores were total junk, then there would be a pressing need to develop custom ones, but ARM's cores are quite good and differentiation can be achieved in the implementation of those cores.

News flash – the high end is slowing!
In the midrange and low-end space, Qualcomm has more or less shifted to ARM-designed cores. Qualcomm's own Krait core found its way into some of the midrange and low-end products, but the variants with ARM's Cortex A7 sold far better and became Qualcomm's workhorses. This is where most of Qualcomm's unit volume is, and -- according to ARM Holdings -- this is where most of future smartphone growth is going to come from.

Arm Slide

Source: ARM Holdings. 

Why should Qualcomm invest considerable resources in trying to differentiate its CPU core at the high end (which is fairly slow-growing), when the top "premium" player Apple (NASDAQ:AAPL) designs its apps processors and captures most of the market anyway? Furthermore, given Qualcomm's superior modem technology (as well as just general system-on-a-chip superiority), its position at the high end with the less powerful high-end vendors is pretty safe -- stock ARM CPU or custom Qualcomm CPU.

Foolish wrap-up
Qualcomm needs to keep its cost structure as low as possible and needs to allocate research and development resources wisely. Staying several steps ahead on modem technology, investing to capture more content share, and bolstering the IPs that can't be licensed from ARM would seem a better use of R&D dollars. Will Qualcomm keep building its own CPU cores? Probably. Does it need to? That's up for debate, but given well how the Snapdragon 808/810 are likely to sell, the answer is "probably not."

Leaked: Apple's next smart device (warning, it may shock you)
Apple recently recruited a secret-development "dream team" to guarantee its newest smart device was kept hidden from the public for as long as possible. But the secret is out, and some early viewers are claiming its everyday impact could trump the iPod, iPhone, and the iPad. In fact, ABI Research predicts 485 million of this type of device will be sold per year. But one small company makes Apple's gadget possible. And its stock price has nearly unlimited room to run for early in-the-know investors. To be one of them, and see Apple's newest smart gizmo, just click here!

Ashraf Eassa owns shares of ARM Holdings. The Motley Fool recommends Apple. The Motley Fool owns shares of Apple and Qualcomm. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

1 Key Step to Get Rich

Our mission at The Motley Fool is to help the world invest better. Whether that’s helping people overcome their fear of stocks all the way to offering clear and successful guidance on complicated-sounding options trades, we can help.

Feb 1, 2016 at 4:54PM

To be perfectly clear, this is not a get-rich action that my Foolish colleagues and I came up with. But we wouldn't argue with the approach.

A 2015 Business Insider article titled, "11 websites to bookmark if you want to get rich" rated The Motley Fool as the #1 place online to get smarter about investing.

"The Motley Fool aims to build a strong investment community, which it does by providing a variety of resources: the website, books, a newspaper column, a radio [show], and [newsletters]," wrote (the clearly insightful and talented) money reporter Kathleen Elkins. "This site has something for every type of investor, from basic lessons for beginners to investing commentary on mutual funds, stock sectors, and value for the more advanced."

Our mission at The Motley Fool is to help the world invest better, so it's nice to receive that kind of recognition. It lets us know we're doing our job.

Whether that's helping the entirely uninitiated overcome their fear of stocks all the way to offering clear and successful guidance on complicated-sounding options trades, we want to provide our readers with a boost to the next step on their journey to financial independence.

Articles and beyond

As Business Insider wrote, there are a number of resources available from the Fool for investors of all levels and styles.

In addition to the dozens of free articles we publish every day on our website, I want to highlight two must-see spots in your tour of

For the beginning investor

Investing can seem like a Big Deal to those who have yet to buy their first stock. Many investment professionals try to infuse the conversation with jargon in order to deter individual investors from tackling it on their own (and to justify their often sky-high fees).

But the individual investor can beat the market. The real secret to investing is that it doesn't take tons of money, endless hours, or super-secret formulas that only experts possess.

That's why we created a best-selling guide that walks investors-to-be through everything they need to know to get started. And because we're so dedicated to our mission, we've made that available for free.

If you're just starting out (or want to help out someone who is), go to, drop in your email address, and you'll be able to instantly access the quick-read guide ... for free.

For the listener

Whether it's on the stationary exercise bike or during my daily commute, I spend a lot of time going nowhere. But I've found a way to make that time benefit me.

The Motley Fool offers five podcasts that I refer to as "binge-worthy financial information."

Motley Fool Money features a team of our analysts discussing the week's top business and investing stories, interviews, and an inside look at the stocks on our radar. It's also featured on several dozen radio stations across the country.

The hosts of Motley Fool Answers challenge the conventional wisdom on life's biggest financial issues to reveal what you really need to know to make smart money moves.

David Gardner, co-founder of The Motley Fool, is among the most respected and trusted sources on investing. And he's the host of Rule Breaker Investing, in which he shares his insights into today's most innovative and disruptive companies ... and how to profit from them.

Market Foolery is our daily look at stocks in the news, as well as the top business and investing stories.

And Industry Focus offers a deeper dive into a specific industry and the stories making headlines. Healthcare, technology, energy, consumer goods, and other industries take turns in the spotlight.

They're all informative, entertaining, and eminently listenable ... and I don't say that simply because the hosts all sit within a Nerf-gun shot of my desk. Rule Breaker Investing and Answers contain timeless advice, so you might want to go back to the beginning with those. The other three take their cues from the market, so you'll want to listen to the most recent first. All are available at

But wait, there's more

The book and the podcasts – both free ... both awesome – also come with an ongoing benefit. If you download the book, or if you enter your email address in the magical box at the podcasts page, you'll get ongoing market coverage sent straight to your inbox.

Investor Insights is valuable and enjoyable coverage of everything from macroeconomic events to investing strategies to our analyst's travels around the world to find the next big thing. Also free.

Get the book. Listen to a podcast. Sign up for Investor Insights. I'm not saying that any of those things will make you rich ... but Business Insider seems to think so.

Compare Brokers