Arm-Qualcomm suit threatens Windows-on-Arm’s future

No one seems to want Arm to sue Qualcomm.

Qualcomm obviously doesn’t, given that Arm’s suit last week asks for damages as well as the company to throw out the work that Nuvia, once the saving grace of Arm’s desktop processor ambitions, has put into place.

Microsoft shouldn’t, assuming that it still believes in a competitive hardware ecosystem for Windows on Arm that has been spearheaded by Qualcomm and its Snapdragon processors.

And Arm shouldn’t, either, given that Qualcomm has a chance to crack open the PC market, which is currently a toss-up between the rival X86 architectures of AMD and Intel. (Well, okay — neither one of these two companies would benefit from the increased competition.)

But here we are, with Arm threatening Qualcomm, one of its chief licensees, as the entire Snapdragon PC ecosystem sputters along while Nuvia works behind the scenes to save the day.

Neither Qualcomm nor Windows on Arm is down and out. But boy, a lawsuit is exactly what Qualcomm doesn’t need right now.

According to Reuters, Arm is seeking an injunction that would ask Qualcomm to “destroy” the designs that Nuvia is working on with Qualcomm. In 2021, Qualcomm bought the Nuvia design team and intellectual property. Nuvia has never announced a product, but the suspicion was that Nuvia was working on an Arm processor that could be used for both servers as well as mobile PCs, and perhaps even desktops.

Arm contends that it had separate business and licensing agreements with Nuvia and Qualcomm, and that Qualcomm was required to re-negotiate the agreement after it bought Nuvia. Qualcomm did not, and Arm says Nuvia’s work is therefore illegally using Arm’s intellectual property.

Windows on Arm with Qualcomm’s Snapdragon already suffered from two problems: a lack of pure performance and compatibility concerns. The latter, at least, has been largely solved. Still, Qualcomm’s Snapdragon processors already lag rival Intel badly in terms of performance; in PCWorld’s tests, the 2021 Snapdragon 8cx Gen 2 5G processor finished behind the 2014 Microsoft Surface Pro 3 and its Core i5-4300 processor in the PCMark 8 Creative benchmark.

Mark Hachman / IDG

Nuvia’s well-regarded design teams were expected to solve that problem, with the new design. But the timetable has slipped, and the processors that Nuvia planned were originally scheduled to ship in 2023 were recast as shipping in “late 2023” earlier this year.

Let’s recap: Qualcomm and Windows on Arm couldn’t run every program than an X86 chip could, until recently. Qualcomm’s current Snapdragon chips don’t offer remotely competitive performance. The two advantages Snapdragon chips did have, long battery life and always-on connectivity, were undercut by X86 laptops that crammed in more battery cells to offset what Qualcomm offered. Don’t forget that the world spent about two years of a pandemic commuting back and forth between the kitchen table and the couch.

Now, the apparent best-case scenario calls for Qualcomm to release its next-gen Nuvia CPUs in late 2023, which puts it up not against today’s “Alder Lake,” nor this fall’s “Raptor Lake,” but Intel’s 14th-generation “Meteor Lake” chip and processors like AMD’s Dragon Range.

Really, could it get any tougher?

A suit could quiet the Nuvia hype

Qualcomm, naturally, denies Arm’s claims. “Arm’s lawsuit marks an unfortunate departure from its longstanding, successful relationship with Qualcomm,” according to Ann Chaplin, general counsel for Qualcomm, in a statement. “Arm has no right, contractual or otherwise, to attempt to interfere with Qualcomm’s or Nuvia’s innovations. Arm’s complaint ignores the fact that Qualcomm has broad, well-established license rights covering its custom-designed CPUs, and we are confident those rights will be affirmed.”

It seems reasonable, according to Bob O’Donnell, founder of TECHnalysis Research, that the two sides will simply exchange some money to resolve the situation — what O’Donnell called “weird,” in an obvious understatement.

“I think they’re going to have to work as if nothing was going on,” O’Donnell said. “At some point, some money is going to exchange hands, hopefully sooner rather than later. And it gets resolved because obviously the longer it drags on, the more serious the questions become in all of it.”

Those questions include whether or not Nuvia can legally continue work, of course, but also whether it could hold to its original timetable with the suit hanging over its head — or whether the Nuvia chips would slip from late 2023 to early 2024. There’s also a question whether Qualcomm can begin promoting what its upcoming Nuvia-designed chips can actually do, something it typically reserves for its Snapdragon Technology Summit, scheduled for Nov. 15.

Qualcomm

That’s important, because even if Nuvia doesn’t have silicon to show then, executives unfettered by legal concerns could talk about expected performance, or potential markets, or any number of things to keep Nuvia’s name circulating — and let’s face it, the entire Windows on Arm ecosystem needs a little hype right now. But does anyone believe that Qualcomm can achieve this when, realistically, any talk about Nuvia will have to be cleared by its legal department?

Again, for now, Qualcomm’s remaining positive. The company plans to share “updates across all of our business lines, including Compute,” at the Summit, according to a Qualcomm representative.

O’Donnell isn’t the only analyst who thinks that this will blow over. Patrick Moorhead, principal at Moor Insights, says

“I don’t think the lawsuit will slow down Qualcomm’s internal development efforts or its OEM and ODM partners, “Moorhead wrote in an instant message. “While some of those partners have expressed concern to me, they also have confidence that it will get resolved. Both Qualcomm and Arm have an incredible opportunity to go after 93 percent of the PC market, and it is in the industry’s best interests to get it resolved.”

“I am sure Apple, AMD and Intel are enjoying all of this,” Moorhead added.

But as O’Donnell noted, November isn’t the first opportunity that Qualcomm will be questioned about the future of Nuvia and its Snapdragon processors. That will likely come in just two weeks, when Qualcomm holds an “Automotive Investor Day” in New York City.

What’s the foundation of Qualcomm’s automotive platform? You guessed it: Snapdragon, and Arm. Let’s see what Qualcomm says to Wall Street then.