The processor business is serious business. Very serious indeed. The fortunes of devices hinge on that bit of silicon that drives them. Grim, serious stuff.
Of course, you would not guess it by looking at the man who heads Qualcomm India.
Larry Paulson is one one of that rare breed of company heads who always greets people with a smile. In fact, I hardly ever remember seeing him without his trademark grin. And it was very much in evidence when I sat with him.
“I hope you don’t mind if I grab a quick lunch while we talk“, he quips. “The schedule is such that it’s really tough to find some free time to eat or do anything else in these conferences.” He grabs a box of what looks like a vegetarian salad, a bottle of still water, and quite appropriately for a man heading a chip company, a small pack of (potato) chips.
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“2017 was a great year”
By some coincidence, I was meeting him almost exactly a year after Paulson was appointed as vice president and president of Qualcomm India. It is the latest stop in a very illustrious resume – the man had tenures at various firms including BrightPoint and Nokia before taking over at Qualcomm India, after Sunil Lalvani exited in October 2016, reportedly over performance pressures. As we settle down, I ask him about his take on the year just past (2017) for the industry in general and Qualcomm in particular.
“2017 was a great year for us,” Paulson says. “This was the year when there was an acute awareness of 4G technology. The industry as a whole invested heavily in creating this awareness. It also coincided with the Indian government’s ‘Digital India’ initiative. On the environment side, we saw some telecom operator consolidation which was a natural thing to happen with the entry of Reliance Jio.” He pauses, bites into his salad, and continues, “The Indian OEMs like Micromax, Lava, and others are coming back nicely after a rough 2016. They were slow with 3G to 4G transition. And yeah, the demonetization (affected things) as well.
“I think, right now, our business is robust. And now, there is this connected world concept we showcased at CES. It takes a lot of investment to drive the technology innovation and our business model, especially the licensing side, allows us to use that revenue to innovate in India and outside.”
And India is very much on Qualcomm’s map. And that is because Paulson believes the Indian market’s features place it in sync with Qualcomm’s plans. “India with its very heavy, tech-based, strong university-based, extremely young population, scalable workforce… It’s right at the center of all these,” he says. “It’s pretty dynamic here. We did a lot here in those 12 months.”
Indian OEMs and the 4G Factor
Which sounds very good on paper, but what about the theory doing the round in some quarters that Qualcomm is not doing enough to work with Indian smartphone OEMs. Paulson pauses, and seems to gather his thoughts as he stares at a water bottle. And then replies: “You have to kind of go back in history to understand this. In the 2G/3G smartphone world, we had no roadmap. For a number of years, Qualcomm had moved on to 4G. In the middle of 2016, the Indian OEMs like Micromax, Lava, Karbonn, etc., were still playing with 3G smartphones with chipsets which were certainly not from Qualcomm. As the 4G world came along, it was only natural for them to continue with their existing supplier, which in this case, is MediaTek.
“But there are a number of capabilities, functionalities, performance activities, system based activities which make Qualcomm offers more competitive, more attractive. So, what we have done over the past 12 months is to have very hefty discussions with those companies in terms of finding ways to motivate them and you would have seen some Qualcomm launches in the market. So the dialogue is very hard. And we have set up a lot of support mechanism.”
What the Indian consumer wants
From OEMs to consumers. As he has spent a lot of time in Qualcomm India, we ask him on what he thinks Indian users look for in a smartphone and how their requirements differ (if at all) from customers from other countries, like the US. No pauses this time as Paulson jumps right in with his answer. “Well, what they look for in a smartphone is sort of universal,” he starts off. “They look for design; they look for value, they look for some sort of trade-off between performance and value. So what we have seen is that through the campaigns like branding campaigns, messaging campaigns, is that the consumers have a buying preference for Snapdragon chipsets.” He notices my expression, and stresses the point: “That’s something for which we have a documented activity on. What they are really looking for, especially in India, is a solid value proposition. They are in that price quest – do they get the right level of memory, do they get the right level of battery standby time, and they are very savvy. Especially, the online buyers, they are very savvy.
“And I think this is where our branding and messaging pays off,” he concludes with a smile.
Chipping in for India
In recent years, technology companies across verticals have tried to come up with India-specific offerings. From Google to Facebook to Apple to Samsung, everyone seems to be trying to get their own slice of the second biggest smartphone market in the world, with a differentiated offering. Does Qualcomm have any plans to come up with special chipsets tailor-made for India. Especially considering as Paulson himself said that India is a budget-oriented market.
Paulson is quick to correct us. “Value-oriented, not budget-oriented,” he points out. “It’s a good question. Qualcomm has a very large employee base in India. A lot of vested equity in the country. And let me answer your question slightly differently.”
He pushes away his snack, lies back on the chair, and continues. “Regardless of how big the Indian business is – well, it IS big, we are looking at a 2 billion phone market which is broken down across price segments – there are synergies between what’s relevant in India, what’s relevant in South East Asia, certain parts of Latin America, Africa, and parts of Eastern Europe. They have the same needs.”
But no, this is not a generic answer, for Paulson switches to specifics. “India though, is a little more dramatic. India doesn’t even make it to the Top 20 countries in terms of the poverty level. When I talk about value, it’s got to do with the culture as well. It’s the way how people purchase in India. In March of 2017, we had the launch of Qualcomm Snapdragon 200 mobile platform including the global launch of 205 chip in India that will be used in 4G feature phones.
“I think this statement alone, that we, as Qualcomm, are willing to engage and enter the lowest point of the 4G market is a statement that’s sensitive to what’s necessary for India. With Snapdragon 210, we have a very competitive entry-level smartphone chipset and we have built some India specific features including support for Indian languages on our IOT platform.”
“We do that for other countries too,” he is quick to add. “So it’s not exactly unique, but it’s custom feature solutions. My team submits India-specific features into our feature board all the time which go through to the overall Qualcomm technology“.
Moving to smartphones…and the matter of Android Go!
At a time when India is considered to be the fastest growing smartphone market in the world, and many people still transitioning from feature phones to smartphones, we ask Larry what role Qualcomm is playing in this transition.
“There are certain parts of the hardware configuration that have visible cost effects. Memory is one of them. The difference between 512 MB RAM and 1GB RAM is pretty steep. And the difference between some of the camera technologies is pretty steep. And the same with display technologies,” he stresses. “So if you put together the lowest denominator of these three components – 512 MB RAM combined with a reasonable camera and a reasonable display, we have a cost-effective design for the user. But Google adding new features year over year has made Android pretty heavy. At the same time, from the Qualcomm side which is the interface side, we have added features over the years. So together, they haven’t done well with 512 MB RAM. In fact, they barely run on 1GB RAM phones.”
Which is where Google came in with Android Go. Paulson points out: “So, if you want to hit the price point needed for India, then both of us had to do something. MediaTek as well. So Google did their part by creating these Go versions of heavy applications and creating Android Go. So our role is in partnering. We think this is fantastic. For Google to make that investment is a real good thing.”
But does Qualcomm have the technology to support this, or will it need new chipsets for the same, we ask. “We have Android Go based activities. And we will achieve that through existing chipsets with new software releases,” Paulson asserts confidently.
A perfect market for Wi-Fi Mesh networks
From Android Go, we switch gears and ask Larry about IoT and its tipping point to go mainstream in India. He quips: “Alexa was just launched in India. That will spur a whole series of products and accessories. You have those Sonos, Bose and other Smart speaker systems. Those are all using Qualcomm technologies.” A point that really excites him is Wi-Fi Mesh networks.
“India is so ripe for Wi-Fi Mesh systems,” he says. “It’s a perfect market for this. As you go ahead with a high dependency on Wi-Fi, like in the US, where three or four years ago, the average number of connected devices in a household was 1.4, and now it has multiplied several times. I have like 24 connected devices at my home. I replaced all the clunky-funky alarm clocks with Amazon Echo Dots that I bought for like USD 29 during Christmas in the US.”
And it is actually his own personal experience in the country that makes Paulson believe that India is ripe for WiFi mesh networks.
“My apartment in India was really bad,” he recalls. “I probably got the lowest cost modem that Airtel could possibly source. And the lowest cost router that can be sourced. And then I have concrete walls THIS big (he indicates the 9-inch concrete walls using his arms) everywhere. With one router tucked away in a remote corner! So I just bought a Netgear Orbi Wi-Fi Mesh system (which is again Qualcomm tech) and it took me just 15 minutes to set it up. It changed everything. Just like the Plume/Comcast deal we announced at the CES, expect similar things to happen in India with awareness growing about Wi-Fi strength.”
5G? Wait for the Tokyo Olympics
When it comes to technologies with potential, we of course, had to ask him about 5G. Qualcomm is one of the biggest companies in the 5G space right now and with telcos like AT&T and Verizon announcing they will have some 5G networks ready by the end of this year, how long do Indians need to wait to experience the next G in connectivity? Paulson is optimistic, but cautiously so. “4G adoption is growing really fast now,” he says. “4G was launched almost nine years ago, but it took this long for India to go full throttle. I use my Jio Phone a lot for its HD voice for all my conference calls. But the Government and policymakers have some work to do. We talk about 5G a lot at the government level and industry level, but I think we have got to wait till 2022 for 5G to take off in India. There will be some noise globally before that. The real products will probably come during Tokyo Olympics in 2020.”
With that, the man who heads the Indian side of the company that drives millions of phones all over the world, shakes my hand and bids me farewell.
Of course, he does it with a smile.
Processors are serious business. You would not guess it by looking at Larry Paulson.
What the heck, we are not complaining.