There has been a lot written about Qualcomm's (QCOM +0.24%) potential "overheating issues" with its latest Snapdragon 810 processor. This has been speculated to lead to Qualcomm losing the next generation Samsung (NASDAQOTH: SSNLF) Galaxy S6, and some even went so far as to claim that many flagship smartphone launches would suffer delays at the hands of Qualcomm's reported delay.
However, fast-growing Chinese smartphone vendor Xiaomi just announced a premium smartphone known as the Mi Note Pro that will feature the Snapdragon 810 processor. GSMArena reports the Mi Note Pro will begin shipping on Jan. 27. The LG G Flex 2 smartphone -- also featuring the Snapdragon 810 -- is expected to ship by the end of the month.
So, were the fears surrounding the Snapdragon 810 just blown way out of proportion?
The one thing that lends credence to these reports
In the AnandTech preview of the LG G Flex 2, the author noted that the demo phones "were running in poor conditions for benchmarks, as maximum brightness was constantly reduced due to thermal throttling."
Additionally, in performance tests of the LG G Flex 2 that did wind up on the Web, the results weren't all that good, with the device often scoring lower than the older Snapdragon 801 and 805 chips in a number of tests. Given that Qualcomm is using a more advanced graphics processor, more advanced CPU, and more sophisticated manufacturing technology relative to the prior gen chips, this should have been a clear win.
So, I do think that something might have been going on with the Snapdragon 810 chips found inside of the samples of the LG G Flex 2. Whether these issues will be present in the devices that end up on shelves won't be known for at least a couple of weeks yet, but it'll be something to keep an eye on.
Watch for performance tests of the LG and Xiaomi phones
The LG and Xiaomi phones based on the Snapdragon 810 will be in the hands of consumers quite soon, so it won't be long before performance tests of actual shipping product will be available. If the performance of these phones proves to be significantly better than prior generation phones, then we can conclude that Qualcomm may have fixed whatever "issues" it might have had.
If the performance numbers in these phones are relatively poor, then the whole situation gets trickier. At that point, I would begin to wonder if Qualcomm wound up offering LG/Xiaomi very low prices just to take the initial batch of Snapdragon 810 chips.
In fact, in that case, the situation with Qualcomm's Snapdragon 810 would very much resemble what happened with Intel's (INTC +1.07%) first 14-nanometer Core M processors. A few vendors put out devices with the initial run of chips in the October/November timeframe even though Intel had already discontinued those chips before they made it to market. Those chips were replaced with variants that ran at meaningfully higher speeds.
What investors should watch for
At the end of the day, all of this discussion only matters because of the potential impact of product problems on Qualcomm's chip business. The company has already given full-year revenue and profit guidance, so what investors should watch for is any material change to the company's revenue guidance range.
Qualcomm is scheduled to report earnings on Jan. 28, and if guidance is unchanged from prior expectations, then all is well. If not, then I'm sure management will give further details about what is actually going on.
