(Yicai Global) Sept. 12 -- Qualcomm Ventures, venture capital arm of the global telecom giant Qualcomm [NASDAQ:QCOM], will conduct investment activities "in line with [its] financial targets and more importantly Qualcomm's strategies, and different product lines will support each other," a senior executive at the company told Yicai Global.
Investment operations should be directly related to Qualcomm's technology products, and the relationship between investment projects and products should be one of mutual support that encourages mutual growth, said Shen Jin, vice president of Qualcomm Global and managing director at Qualcomm Ventures.
Secondly, investment projects should serve as a 'probe' into new businesses, discovering development opportunities for the parent company in industries other than chipset and wireless devices, he noted.
Thirdly, industry chain investments can focus on businesses that are well beyond those operated by the parent company. For example, Qualcomm is actively promoting the development of 5G networks, so the company is seeking investment opportunities within the 5G industry chain.
"Qualcomm Ventures bases its investment decisions on industry [development] rather than the business development stage [of target companies]," Shen told Yicai Global reporter. "From 2008 to 2015, [we] invested in businesses throughout the internet industry, including hardware and software ranging from education, mobile advertising, cab hailing and input systems."
From 2015 onward, the firm shifted the focus of its investment operations away from mobile internet toward frontier technologies such as artificial intelligence, extended reality (including augmented reality (AR), virtual reality (VR) and mixed reality), robotics, unmanned aerial vehicles and Internet of Everything.
"Internet of Everything, or the Internet of Things, has come out of the doldrums and started on an uphill climb. The UAV market still needs more rationality. AR/VR needs to break through many more technical barriers, and the AI industry has reached a peak." He shared his opinions about the current development stages regarding the major frontier technologies.
The UAV industry has indeed encountered some challenges, he admitted. "For now, the market is somewhat irrational. In the case of consumer self-timer UAV products, in particular, users still can't do drone setup in less than one minute. The technology is still immature, and it may take another five years to solve the problems."
Qualcomm has adjusted its UAV investment strategy accordingly. It invested in an US-based drone developer, 3DR, but the firm has switched to mapping and building photography businesses. Qualcomm Ventures has also invested in an Indian military and industrial drone company and a UAV flight management company in the US. "Investment operations are still focusing on industry applications and fans of unmanned aerial vehicles."
The popularity of VR and AR has also waned on the investment market. HTV Vive, PSVR and other high-end VR headset products have been marked down, because their performance cannot meet consumers' expectations.
"If we go out for jogging in a rush, and find that we got the wrong shoes and clothes, and forgot to bring water, we have to go back home and make preparations before we can start jogging." The VR and AR industries are in the same situation, Shen noted. Many VR content vendors do not want to produce VR contents based on good intellectual property, mainly because some technical barriers still remain to be removed, and VR user experience is still not good enough, he opined.
He believes, 5G networks' fast connection and low latency will lead to technical breakthroughs in the VR/AR technology, and AR/VR will become the 'secondary computing platform' by that time. Until then, however, "startups should not venture outside, and they should get down to solving the technical problems instead."
AI is the new buzzword in the investment world at the moment. Qualcomm is more interested in AI devices than cloud AI products. In order to increase market penetration, he suggested, the AI technology must be applied in terminal devices first, and real-time response application scenarios are also needed.
Based on this understanding, he predicts smartphones would become AI's largest platform, and given the sheer size of the smartphone market, it would be able to spill over to other businesses that involve the use of chipsets and hardware.
"Generic AI platforms have very few investment opportunities now, and investors should be very cautious," Qualcomm Global vice president said, "But investor opportunities can still be found in specialized businesses such as agriculture and education."