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Qualcomm chips to power Mercedes, BMW infotainment systems

Qualcomm (QCOM) will be supplying chips for Mercedes-Benz (MBG.DE) and BMW’s (BMW.DE) infotainment systems, such as displays and voice commands. Yahoo Finance's Pras Subramanian breaks down what this means for Qualcomm, as the company has been seeing smartphone revenue slump.

Video transcript

RACHELLE AKUFFO: US semiconductor giant Qualcomm will supply chips for Mercedes and BMW's infotainment systems, including displays and voice features. Let's get the details with Yahoo Finance's Pras Subramanian. Hey, Pras.

PRAS SUBRAMANIAN: Hey, Rachelle. Yeah, a nice little coup here for Qualcomm over its rival NVIDIA. As you mentioned, Qualcomm supplied chips for infotainment and self-driving tech for Mercedes and BMW. These chips will appear in new Mercedes E-Class and will also power some of those voice commands you mentioned in new BMWs as well.

This as Qualcomm sees revenue for smartphones slump recently, but autos are a bright spot here, with sales climbing 13% last quarter in that sector, while outlook for the smartphone business fell short. CEO Cristiano Amon highlighting the importance of the auto sector, with Qualcomm seeing revenue rise to $4 billion by 2026 and $9 billion by the end of the decade. Rachelle.

RACHELLE AKUFFO: I mean, certainly smart making that increased pivot into autos when you see that what we're seeing with phones and PCs slumping. Now, let's also talk about competition, though, in the EV space. There was a notable concept car debut for Mercedes this weekend. What's the deal there?

PRAS SUBRAMANIAN: Yeah, so kind of a stunner here at the Munich Auto Show over the weekend. Mercedes debuted their CLA EV here. Sort of the CLA class, normal gas powered cars, they're going to kind of cancel that car, sort of see it off into the sunset. But then they announce this EV that's going to come up based on a concept that will be sort of almost production ready.

This new car is quite stunning in its looks. Going to have also around 400 miles of range, if not a bit more than that, so it's sort of taking on Tesla, the Model 3, which is around 320 or so, so Mercedes upping the ante there from a range point of view. But also, as we know, Mercedes knows what they're doing with luxury. A nice wide screen digital display in that cockpit. It's going to look great, I think. So we'll see that probably in the next year or two coming out from Mercedes. Can't come soon enough for the brand, I think.

RACHELLE AKUFFO: I love that, and I love the fact that even though, you know, these EVs don't need a grill, this one has one on there because it still makes it feel a bit more special. I cannot wait. I'm sure at some point hopefully you get to try that out for us. Always great to have you on. Our very own Pras Subramanian.