Qualcomm (QCOM) is committed to building a sustainable fifth-generation cellular network (5G), which CEO Steve Mollenkopf says will have a big impact on the American consumer.
“I think you're going to have more speed. Obviously, people like more speed,” Mollenkopf recently told Yahoo Finance’s editor-in-chief, Andy Serwer. “But really, what you're going to see is, the ability to get access to this will grow dramatically, meaning coverage, availability of just unlimited data plans.”
Qualcomm makes processing chips for phones and is on the frontier of making 5G chips. Consumers will need new phones with 5G chips in order to access the network, which promises lightning-fast speeds that will let you download an entire movie in mere seconds rather than minutes.
While companies like AT&T (T) and Yahoo Finance parent company Verizon (VZ) have begun to roll out their 5G network in select cities, the network needs more phones with 5G chips on the market to begin to really take hold.
Qualcomm has built 5G processing chips into Samsung phones and reports exist that Qualcomm will build a 5G chip into Apple’s (AAPL) iPhones to be released in 2020. Qualcomm and Apple recently settled a long-running patent suit — that day, Qualcomm’s shares were trading up 23%. (However, Apple recently acquired most of Intel’s (INTC) modem business, meaning it could be less dependent on Qualcomm’s chips in the future.)
Also at issue is the cost of 5G — Mollenkopf believes his product will reduce costs.
“Obviously, the carriers have different economics on this, [but] you have tremendous improvement in the cost per bit,” he said. “One estimate is, [cost] goes down by a factor of 30 — just tremendous business models that are up for grabs as you get that much capacity that comes online. Part of that is due to the technology. Part of it is due to the spectrum allocation. So it's a real big change in terms of the economics of providing this technology to the consumer.”
Mollenkopf made his comments in a conversation that airs on Yahoo Finance in an episode of “Influencers with Andy Serwer,” a weekly interview series with leaders in business, politics, and entertainment. And he told Serwer that the innovation is just beginning.
“I think there'll be a lot of experimentation with the business model. Particularly in the United States, you're seeing companies try to figure out, can I have a business that competes with wireline operators and all that?” he said. “You'll see a lot of business model evolutions, which we're excited about.”
Calder McHugh is an Associate Editor at Yahoo Finance. Follow him on Twitter: @Calder_McHugh.