The reason why OEMs always want to acquire chip heads - Knowledge sharing blog

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Smartphone OEMs - most notably Samsung, often make a very aggressive move every New Year: They announce they will acquire the entire first batch of chips (Snapdragon 8)xx) the latest in that year exclusively for their products.

And still with the old tactics, this year, when the Snapdragon 865 was not released, many OEMs announced they would be the first smartphone running the 865 chip in the world. So what is the purpose of this?

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#first. What does acquiring the first chip mean?

This only happens with Qualcomm's Snapdragon chip, and is the new 8xx generation chip line for flagship phones.

The acquisition of the first chip means that the OEM will try to buy the entire first batch of the chip, which is willing to pay a higher price than the previous OEMs to compete with this new chip number.

The purpose of this is, of course, to make its flagships sooner. Specifically:

  • Samsung blocked the first batch of Snapdragon 835 chips for the Samsung Galaxy S8, and the Snapdragon 845 chip for the Galaxy S9.
  • Xiaomi is blocking the first batch of Snapdragon 855 for their Mi Mix 3 5G.

And this year, both Sony, Xiaomi and many other Chinese OEMs have strongly stated: They will release the world's first Snapdragon 865 smartphone.

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#2. The reason for the phone carrier always Want to buy the entire first chip?

The first is early nape. Announcing the launch of a smartphone with a new flagship chip, the world's earliest will help them win the attention of technology followers. This is beneficial for Xiaomi or Samsung, but don't understand what Sony does this for!

The second is to acquire the market: Qualcomm may take a long time to get the second shipment to other OEMs. This means that early smartphone launchers will have plenty of time to take over the market. Samsung Galaxy S8, S8 + and Samsung S9, S9 + did a great job!

The third is to make it difficult for other OEMs: Not just a market issue, this hardware acquisition will affect the manufacturing process of other OEMs.

For example: Samsung and LG are both OEMs from South Korea. Samsung has Galaxy S LG also has lines G serie. Similarly, Samsung has Galaxy Note then LG has the line V serie.

And the launch of the Galaxy S was very close to LG G the same year. Until 2017, when the Samsung Galaxy S8 and S8 + launched, LG didn't have a Snapdragom 835 chip to produce the LG G6. This is too disadvantage for LG.

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Therefore, they decided to use Snapdragon 821 to launch on schedule. Snapdragon 821 is just a tweaked chip from Snapdragon 820 on LG G5 to fix the temperature and performance issues, but it is not effective. Thus, LG G6 is a step backwards of LG, even though LG V30 still has 835 chip.

Finally, it is a test for the next model: Samsung can consider how the Snapdragon works on the Galaxy S to be able to refine it to the best and most optimal way before putting it on the Galaxy Note launched in Q3 each year.

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# 3. Conclude

As such, blocking the chip is just one of the business strategies and the competition of the big OEMs, but I find this way to be not very welcome, also known as bad play.

So how do you feel about this strategy of the current phone companies? Leave your comments below this article for your viewing angle!

CTV: Nam Hoang -

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