According to a recent report (via Phone Arena), the LG G4 flagship smartphone is expected to feature Qualcomm's (NASDAQ:QCOM) Snapdragon 808 processor rather than the higher-end (and almost certainly higher priced) Snapdragon 810.
As a Qualcomm shareholder, I'm curious as to why LG would opt for a lower-end chip, when it seems that other flagship Android phones, including LG's own G Flex 2, are powered by the Snapdragon 810.
My best guess? Margins.
The Snapdragon 808 is certainly a less featured and lower performing part than the Snapdragon 810. It has fewer high-performance CPU cores, a weaker graphics processor, and has just half of the memory bandwidth that the Snapdragon 810 features.
The "obvious" reason for a phone vendor like LG to choose a chip like the 808 over the 810 would be that the 808 is likely cheaper to buy from Qualcomm. The not-so-obvious reason would be that the 808 is actually much cheaper to implement in a smartphone.
This could allow LG to improve its margins per unit at similar prices to competing devices using the Snapdragon 810, or it might be able to sell the G4 for cheaper than the competition.
Why is the 808 so much cheaper to implement?
Putting aside the actual chip cost difference, the Snapdragon 808 uses tried-and-true LPDDR3 memory, while the Snapdragon 810 requires the relatively new and more expensive, LPDDR4 memory. The memory interface on the 808 is also narrower than that on the 810, which may also contribute to the 808 being cheaper to implement.
It might not seem like this is a big deal, but given the razor thin margins that Android smartphone vendors operate on, those dollars saved can actually have a real impact on the bottom line.
The risk of losing performance tests
If the G4 does, in fact, use the Snapdragon 808, then the main risk for LG is that the G4 would very likely lose performance tests against competing devices powered by the Snapdragon 810 chip. Chip performance isn't the only factor that customers consider when it comes to picking their next smartphones, but I do think that it's an important consideration to some.
Perhaps LG will redirect any dollars saved by giving up the 810 for the 808 toward other features that users would more readily notice. Some examples include an improved display, better cameras, and greater battery life.
Will the Snapdragon 808 gain additional traction?
According to Qualcomm, the higher-end Snapdragon 810 will power in excess of 60 devices; it hasn't said much about design traction for the 808. I suspect that the 810 will be more popular since most of the Android device vendors will want to put in the fastest chips that they can get their hands on for competitive reasons.
That said, I'm interested to see how much additional traction the Snapdragon 808 gets and at what price points Snapdragon 808-powered phones, as the LG G4 is said to be, come in at.
Will LG aim at the same $199-with-2-year-contract that other flagship devices come in at, or is the possible use of the Snapdragon 808 an indication that LG aims to build a lower priced device with the G4?
I'm sure we'll know a lot more once LG formally unveils the device at its press event scheduled for April 28.
Ashraf Eassa owns shares of Qualcomm. The Motley Fool owns shares of 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.