The post-lunch session. I'm Samik Chatterjee again. Thank you for being here. I have the pleasure of hosting Akash Palkhiwala, CFO of Qualcomm. I know you guys will have a ton of questions, so I'll just start it off with a couple here for Akash, and then, I'll let the audience take over and sort of dive into all these smartphone questions for you. Oh, I love those. Let's start with AI. A big driver of discussion at the sessions we are hosting today. You've talked about generative AI in some of your investor outreach as well. Can you outline your thoughts on why it'll be important for edge devices to have AI capabilities? What drives the confidence to have AI, like, just have that confidence about content associated with AI on the edge devices? Yeah. First of all, thanks, thank you, everyone, for attending, and happy, happy to be here. Our, our view on AI is very simple. It's very much like processing, right? You have processing that happens on the cloud, processing that happens on the device. We end up... We, we see AI kind of happening the same way. We're gonna start with the cloud. Eventually, a lot of the AI processing will move over to the device for several use cases. The, the advantages of doing it on the device are very, very straightforward. Cost, of course, is a massive advantage. It's in some ways, it's sunk cost. You bought the device, it's sitting there in your pocket. It could be processing at the same time, when it's sitting there. That's the first one. Second is latency. You don't have to go back to the cloud. Privacy and security. There's data that's user-specific that doesn't need to go to the cloud when you're running it on the device. Beyond all of these, we see a different set of use cases playing out on the device. If you think about pervasive AI, whether it's a Copilot for an office application, or whether it's a Copilot or AI being used on top of content that is being created by users, all those use cases requires AI to be on the device. We just think there's a whole set of use cases that demand the need for AI to be on the device. We have really strong technology, we think, that enables that. Of course, we have the CPU, we have the GPU, and both of those cores can do generative AI. more importantly, what's, what's gonna be critical in the longer term, in our minds, is to have a very low power neural processing engine that can do AI on the device. If you're gonna do pervasive AI, that happens several times every minute, it needs to be extremely low power, and the advantage of having our neural processor is it can enable use cases like that. That's kind of our general view on AI. You're still gonna do a lot of training in the cloud, in my mind, but then the trained models need to be inferred, and the inference running on the device makes a lot of sense. Eventually, in the long term, you could see models being trained with user-specific data on the, on the device as well, but that's probably a second step. We'll start with inference on the first step. Okay, how broad do you see the device ecosystem being creative to, like, just smartphones? How much of a broad reach do you see in terms of these capabilities moving beyond smartphones? You know, a lot of these use cases, I'd almost like categorize it into consumer, enterprise, and industrial. The use cases are gonna be pervasive in all devices. If there are consumer use cases that apply to handsets, there are other consumer use cases that are gonna apply to PC. We know that PC is going in the direction of becoming an AI PC device already. Same is gonna happen to handset. You go into industrial applications, there is tremendous opportunity to use Generative AI for new use cases, new capabilities that you could not do before, now you'll be able to do. Finally, enterprise. Obviously, Microsoft has a very clear plan that they've outlined on enterprise applications and having a Copilot within each application to enable use cases. This is not something that remains in one device. It is not something that remains in one tier of device. It goes across tiers, it goes across devices, and it becomes something as ubiquitous as just normal processing or computing. Just like every device needs a GPU, it needs a CPU, it is gonna have use cases that requires a very low power AI engine, which in our case is BNP. Okay. Your announcement with Meta, to optimize execution of Llama 2 language models directly on the device, what's the broader vision there? What are the use cases that you're thinking of when you're sort of looking at that implementation? Llama obviously has tremendously broad application. As it became one of the open- key open source models, there's a lot of ecosystem that uses the Llama model to run applications and use cases on top. For us, it's relatively straightforward. We're gonna take our advantage that I just outlined, bring Llama for on-device AI. This is... never goes to the cloud. The entire model runs on the device, and then that automatically brings with it all the ecosystem of applications and use cases that are gonna be created. I, I won't sit here and profess that here's the specific use case that we think is gonna drive drive the adoption. It, it's not gonna be one, it's not gonna be ten, it's gonna be millions of use cases, I think, that will be enabled in the broader ecosystem, and they'll all run on the device in one form or the other. Okay, interesting. Any thoughts, early thoughts here, of what your TAM for AI-related content would be associated with end markets? Like, if you were to quantify smartphone versus non-smartphone, how are you sort of even thinking about the size of those opportunities? Yeah, if you. I think coming up with a specific number, it's too early in the cycle, but here's the framework of how we think about it. First is, we've seen a tremendous increase in phones, smartphone content, especially for us, especially in premium tier devices over the last three years. This, to me, kind of drives the content growth going forward. In addition to other things, this will become a big driver of how content will continue to grow in smartphones. We used to get this, a lot of questions about, we've seen great content growth, what is going to drive the growth going forward? This is gonna be one key driver for us. That's the first one within phones. Second is, I think from a competitive perspective, we have technology that's unique, and so this allows us to continue to maintain our differentiation and our advantage as, as use cases get deployed. In new markets like PC and XR and industrial, where we don't have a very large presence today, I see this as almost like one more advantage that we'll bring with us when we go into those markets. Probability of success hopefully improves, because now we have something else that's unique that, the market is demanding. Finally, I think you could also make an argument that as these use cases get deployed, it will drive replacement rates in various edge devices, assuming there's broad adoption. So we think of that as an upside to not just our handset market, but also, the other markets we're going to participate in. Another way to look at it, I mean, you at your last analysis, you had outlined industry CAGR for your QCT handset to be double digits, and at that time, you had mentioned you were assuming flat smartphone market to be flat. Obviously, we all know that hasn't remained the case, when you think about content growth, you were sort of embedding at that point, is this sort of part of that content growth that was already sort of envisioned at that point to be double digit, or is this upside really to that double digit growth? How should we think about that? Yeah. The content growth happens in multiple ways, right? Like, one is just look at a specific tier and then generation over generation. If you look at the last three years, and we've talked about this last year, is the die size, if that's a metric for content growth, has grown at a 10-ish% CAGR for the last three years. This clearly kind of positions us to stay on a curve like that going forward. It's not just about what happens within a tier. When these new use cases come in, we see a shift across tiers, which improves the mix. When you look at a weighted average content growth, it also helps from that perspective. We have a very broad view of this. We don't want to enable this just in the premium tier devices. We're going to enable it across all tiers of devices. As people upgrade the next set of phones, we think there's an opportunity for upgrades, or people buying higher tier phones as they do that. Taking that forward, when you sort of see the differentiation Qualcomm has to bring to this market, it also raises the question that clearly the smartphone OEMs would also look at this as an area that they can differentiate on themselves. Going back to a lot of the discussion sort of going around about in-house capabilities at the smartphone OEMs, how do you think about their intent to then invest in in-house capabilities related to the processor, and just sort of look to even sort of create their that differentiation on their own rather than wait for or rely on Qualcomm? So if you think about how this technology works, it's integrated into our SoC. It relies on CPU, GPU, and NPU, and depending on which model and which use case, you could use any of those engines. And so when we think about the competitive landscape, we've done this for a very long period of time, number of competitors, if anything, has gone down rather than gone up. We've also competed with several internal efforts of the OEMs. And what has held true through the entire process is if you have technology leadership, if you are delivering a chip that is leading node, all technology is integrated, you have a better CPU, we'll have a custom CPU coming in shortly, a better NPU, wireless leadership is intact. When you put all those together, we think we're extremely competitive, and we continue to have the advantages we've had in the past. We like our position going forward. Okay. Let me open it up to the audience, see if anyone has a question. Any questions? Go ahead. Maybe just stepping back to a year ago when we started seeing some of the challenges in the supply chain. At that time, you had quantified sort of the inventory impact to about $3 billion-$4 billion, maybe $3 billion of that smartphone, the rest in others. If you look at where we are at now, is this possible to figure out how much we're under shipping the industry by, specifically in smartphones? Because we haven't seen the recovery off of that. Units are down, I understand that, but if you look at fiscal 2023, you're down- The, the one framework that I think is relevant is, if you look at the two years combined, fiscal 22 and fiscal 23, there was a build in a year, there is a drain in the next year. Looking at the two years combined would be like one framework. The adjustment that you'd have to make to that is the market is lower than the, what the weighted average would be. Adjusted for market size, I think that's a reasonable way to think about what, how much we're under shipping and what comes through soon. You can debate what the timing is, but it almost, in some ways, when you're looking at the company long term, it almost doesn't matter. Just going back to that $3 billion-$4 billion sort of number, and understand we have adjusted for Huawei at a smaller market. Yeah. $3 billion of that was Huawei, is smartphone. Is it fair to say market's 10% lower, Huawei is $1 billion, so that $3 billion is more like $1.5 billion? In fact, this year it's not really growing, so that could be the level you're under shipping the market. Well, Rather than get into the specific math, I think the framework that I outlined would be the right way of thinking about it. If you, if you do the, the math on that framework, I think it'll, it'll probably put you in the right spot. Oh, Akash, just to sort of carry on with the smartphone market questions. I think one of the perception that investors have right now of the modem of the SoC market is that it's, it's as good as it can be with Apple continuing to use Qualcomm right now. Samsung is clearly sort of giving you more share at this point. It seems to be the perception that this is all going to sort of move more steadily towards in-house, Apple moving in-house, Samsung sort of overall coming back with Exynos in the market, Huawei starting to insource. How do you think about sort of that broader perception? Is that accurate, that this is sort of a period of time in the cycle where things are as good as they get in the merchant silicon market? We've, we've lived this market for a long period of time, and I, I hear this argument every two years. The reality is, history would tell you that our position in the market has grown stronger over a long period of time rather than become weaker. Just you go back to pre-COVID versus where we are today, we've seen a tremendous increase in scale in our business, but more importantly, content has increased in a very big way. We feel very confident that from a technology perspective, we're in a great spot. From a content increase perspective, we're in a great spot. We have our custom CPU coming in shortly. We're going to have the AI neural processing engine. That is gonna be very important. When you put all of those together, we're in a very competitive place going forward. There'll be ins and outs through the years. Just when we look at the trajectory, we like our technology portfolio in handsets and our ability to take that portfolio to other markets. Okay. I mean, does, in your view, the geopolitical situation sort of change how things have played out versus the prior cycles, particularly when it comes to some of the Chinese smartphone OEMs? I mean, yes, you've sort of continued to manage to showcase your technology and sort of expertise to sort of drive that content game higher, but does it now change because of where the geopolitics is and where customers want to go in the long run? I, I think you can look back at the last year and how things have played out, and we've continued to sell our portfolio. For us, what we control and what we think puts us in a good, good place is the roadmap, is the technology. As long as we are leading in that, there's always, there's always gonna be a demand for it. We're continuing to work with all of our customers, Samsung and Apple, but also the Chinese OEMs, and we feel like our competitive position continues to be strong. If you look at year-over-year, what has happened to our market share within the Chinese OEMs between fiscal 2022 and fiscal 2023, if anything, we have strengthened our market share. Okay. Yes, sir. Appreciate that. Of course. In terms of the kind of longer term opportunities for what could be done on the device, how, how important is, like, phone operating system working in conjunction with silicon? Just curious, like, what, what friction is there or what- Is the question specific to AI, I assume? Yeah, specific to kind of, either a personal assistant running on device or kind of bigger opportunities that you think could be really revolutionary for handsets or PCs. Like, what, what work needs to be done from an OS tied with core processing? If, if you think about our kind of key partners as we start working in this direction, Microsoft is gonna be a key partner, and we've announced a bunch of work we're doing with them. It not just applies to our PC efforts, 'cause they have a vision of pervasive Gen AI within all their productivity applications, including an assistant, digital assistant, AI assistant. They're a key partner as we bring them to handsets as well. Second is Google, of course. Clearly, this is a big priority for them as they deploy new models and new use cases, especially within their own apps. We'll be working with them to bring that to market. Third, we talked about Meta and Llama, which is- has become one of the more important AI models out there, and so applications are being built on top. We're gonna bring them to the device as well. For us, it's important that we are working with each of these ecosystems, and each of them take advantage of the hardware capabilities we're putting in our chip. Is there any advantage to doing that? I guess, to put it a different way, like, do you see a future where Qualcomm should be driving development of the models because having a closed ecosystem of, you know, the underlying soft- the software and the hardware being from one vendor, like, there's things that you could accomplish that way that you couldn't accomplish if it were a third-party model running on your hardware? If you go back to the different hardware that can run models, right? You're gonna have CPU, which is more of a standard approach to running models on it. Same thing on GPU. There are standards that will be used to run the models. NPU will be our advantage in the long term because of it being a specialized engine to run these models at very low power, and that is where the opportunity to partner closely will be, is to put these models that would run pervasively on the device on our NPU, optimize it, and allow the performance to be better. I guess to ask everybody, like, do you see any potential that for model providers or for people who are trying to drive the application ecosystem, that it would make sense for them to try to design an NPU type competitor and, like, build a device where, you know, like we're doing CPU, GPU, modem, but the NPU is like a OS specific NPU? In our minds, what would make sense is to have all those engines all available to the application ecosystem, and to build it in a way that there's a single SoC that's serving all those applications. Just history lesson in phones is, you used to have a bunch of different chips. Everything gets integrated into one piece of silicon because size matters, power performance matters, consistency across applications and use cases matter. Architecture, the integrated architecture has always won in the past. We continue to believe that integrated architecture is gonna win. If anything, in the PC side, as you look at it, there's actually more integration happening rather than the other way around. Got it. Okay. No, that makes more sense. I, I guess the piece that like I've always tried to kind of, you know, you guys do obviously a very competitive CPU, GPU, and now NPU. But the one piece that, like, has actually proven very hard to replicate is the modem. As much as you guys like, I feel like kind of try to shift the focus to the other pieces, you know, there's two modem providers left standing, and it's been really difficult for even very talented silicon design teams to replicate there. I guess I'm just trying to understand how you think about the durability of a leading competitive position on edge, CPU, GPU, NPU, relative to what we've clearly proven to be a durable industry-leading position on the modem side. Yeah. First of all, thank you for acknowledging our leadership in modem. I like that. I would say it a little differently. What makes us strong are not the parts, but the whole. That is, it being very good at parts. Of course, if you said, what is Qualcomm best at in the world? It's the modem. I have no question about it. The race in phones is about doing the whole. That is why there have been fewer and fewer players in the industry, and then it's down to a couple of merchant players, whereas we used to have 10 competitors at one point. Doing everything in one piece of silicon is what is difficult. The way we think about advantages, we should have the best core, and then we deliver an integrated solution. I think breaking down the competitive advantage into one or the other core is actually maybe missing the point on what makes us unique. Yeah, go ahead, sir. Following on that. Yeah, let's sort of see, the smartphone business is X growth. It's not, and, so it's, it's a no-growth industry, and- Units or content? Just dollars. Let's just say dollars. Units. Units. Units no growth or low growth, but you might think otherwise, but just not really growing. Yeah. With AI, you know, if you're running LLM, I don't know, five, 10 billion parameter model at the edge, let's say... Yeah. -someday. Yeah. Every device. Your NPU next gen versions can run these models, but you don't want to push it all the way back to data center all the time. You want to do a lot of the computer at the edge. Makes total sense. Can you at least get, you know, this would probably imply a bigger die, bigger ASP, and that, that this will be a ARPU, a ARPU driver of edge inference compute. Do you see that happening? When does it happen? What do you need? What kind of changes need on the NPU, compute, compute and power envelope to be able to run multi-billion parameter models in the edge on your phone? Thank you. Yeah. Well, everything you said, the answer is yes. We, we definitely have the strong view, and I think I mentioned this before you came in, that, going forward, we see these models running on device. We've talked about 10 billion-20 billion parameters models running on our devices next year. Next year. The way we are enabling that is through a much more powerful NPU and infrastructure around it. As I said earlier, models will run on the CPU, on the GPU as well, so it is across all three. When you want to run something pervasively, power becomes extremely, extremely important, and that's when the advantage of a dedicated processing engine becomes important. We definitely see it as a content growth opportunity. Just when you look back and you look at our revenue per device, it has gone up very significantly over the last three years, and we, we continue to expect this as one of the key drivers going forward, just as you outlined. Yes, sir. My question is on the smartphone industry. I think, you know, everybody said it's X growth, but markets shrunk 20% in units in the last two-three years. The last market that was supposed to be excluded, which PC went through an upcycle and down. That, how do you think about it over the next two to three years? Is this, is the, is the right assumption just to think about it as flattish, or at some point there, you know, upgrade rates will come? Yeah. Yeah. Of course, I'll have a somewhat optimistic view of it. Let's go back to history, because usually there's good things to learn out of it. What has happened in the cell phone market through history is when a new, new use case or a new inflection point comes in, replacement rates go up, and then over time, it normalizes and then goes back up again if there's another new set of use cases. What is important for us is, as we look forward, there was a 5G cycle we went through. During the 5G cycle, for Qualcomm, content actually grow-- grew more on the application processor side than it did on the modem side. As we go forward, we think, to Tony's earlier question, like Gen AI and the use cases that that could bring, could drive a whole set of upgrade cycles in the phone going forward. That's the history of the phone market and the replacement rates, is we had two factors driving the market. We had the total market growing as more people were buying phones, but then people who had phones replacing at a certain rate. Replacement rate has tempered down a bit. We think there's an opportunity for that rate to go up as you go forward. Yeah, I'm just thinking from the last time this year, if you think about a multi-year CAGR where we thought it was going to be flat, it sort of done this. If that flat number is right, it has to at some point recover. Should we think- Yeah. Of this as a new base? I think that that's one way of thinking about it. The other way is, a bunch of people upgraded their phones in 2021. If you look at a three, four year replacement cycle, you should get a redo of that in next year or the year after. Again, I'm not, like, saying something unique, it's just that this is how the market operates. Gen AI obviously sits on top of that as a reason to upgrade as well. Yeah, just two questions. In the context of working with Meta, your customer isn't Meta, though. Your customer is handset makers, and they have a different view of whether or not your product works better with Meta or not. Just how do you dial that in with working with Meta when you know your customers aren't Meta? Uh, so- They may not want you to work well with them, for example, right? So if you go back, we worked with Google for all Android devices in the past. Before that, we worked with operators to deploy 3G, 4G, 5G, not our direct customer. You go to PC, we're working with Microsoft, again, not our direct customer in that case. It's really about enabling the ecosystem and the partners that play a very, very key role. Sometimes the indirect customer is actually maybe as important as your direct customer, and that has certainly been true in our history. Especially as you go to how the company was created, it's really coming up with technology, selling it to the operator, and then driving pull-through with the OEM of that technology. That's the same model that applies to really everything on the application processor, OS side as well, and it applies to Meta relationship. In terms of like all involved outputs, then you think inference on mobile device will cause, what do you think that actually will look like? Is there any rule of thumb of how this looks to pass constant increases, in addition to that view and silicon area there, we're going to need a lot more DRAM, the whole model, things like that. I'm just curious how testers test it when they're looking at this. What's the long price to get started? Yeah. I'll stay away from talking about an area that I honestly, I'm probably not the expert at. I'm sure a lot of people at Qualcomm can talk about it. I'm probably not the expert. The way this business, in my mind, typically works, the handset business, is when you add new capability to a device, pricing largely gets driven by not BOM, necessarily, but just ability to charge a premium. You've seen that come through, where if you say, "Okay, how much BOM did we add from a cost perspective over the last three years versus what has happened to the handset, handset price?" You would say it is disconnected. I think there has been a significant increase in the handset price versus the cost that has been added to the phone in my mind. I think that would be the overlying, overlying framework on it, but when you look at the specific cost that we think it drives, it's significant for us. From a total handset BOM perspective, I don't think it's a massive change. The key thing here is the use cases. How do we get the use cases onto the device so that the consumers go look at that and say, "I want that device"? That drives the replacement rate. That's, that, to us, is the most important thing. Ask about your software efforts here, because, again, you have stuff going on in the data center where people have the silicon, and then it's the software that brings the ecosystem together and, you know, makes it more valuable than the silicon. In case of inference, I mean, you can, you can always take a silicon view of it and say, you know, it's X perform or Y, Y perform. Do you think there's a path for you to leverage your software stack for inference a little bit more and sort of get developer traction and sort of replicate the model that's been played out in, in the data center a little bit more for a, a bigger premium, or is that too far-fetched? I think there's an opportunity for models to be optimized for our chip, and then having developers leverage the optimized model to run use cases. How the business model around that plays out, I think we'll have to see over the next couple of years. The core framework that you're applying from the data center does apply to devices. There's obviously other players in the ecosystem as well in the device side, so you have to work through that. I'll stay away from commenting on exactly how I think it's gonna play out. We don't know yet. The fact that we have the optimization to be able to run very large models that others can't, does create an opportunity for us to have a stronger position in that conversation. The, the other thing I would say is, we're talking about phones in this context, right? Once you get outside phones, especially if you get into IoT devices, where the ecosystem is a lot different than phones and PC, where there's a strong software player, you have the ability to play a bigger role in those devices, as well. I think that, that's kind of another framework to remember when you think about opportunity. Akash, let me just try to sort of wrap up the smartphone conversation with. Let's assume the size of the smartphone market is notably smaller than pre-pandemic, and it remains that way. You don't get an acceleration of the replacement cycle in the near term. How are you thinking about cost structure in both QCT and QTL, which would both be impacted by it? Yeah, I mean, we announced announced on the call that we are planning to take additional cost actions. We've already exceeded the cost actions that we outlined. For, for us, the framework is relatively simple. We've talked about specific targets, and this just shows we're willing to take action when the size of the market is different than what we'd expected at the beginning of the process, so we're going to execute on that. Okay. Switching over to PCs, where are you with sort of plans in terms of chips for the PC market? What's the progress in terms of the NUVIA chip that was, that is expected for the PC market as well? Yeah. No change to timelines we've outlined in the past. We are sampling the chipset that has the NUVIA team-designed cores in it at this point, already to customers. The devices will be launched mid-next year as going into back to school and holiday season. That's the typical cycle of PC launches. There is a significant amount of work that we need to do in enabling all these AI use cases, so we come in with a advantage from a generative AI perspective. We're very confident of the performance that we're going to have on the chips. This is not just a CPU that you mentioned, but we're going to have everything else integrated into the SoC with dedicated hardware, right? Same as phones. We're gonna have a GPU that we think is, is very strong. We'll have the camera. Camera has become obviously a very important part of the PC. It was not in the past. Now with video calls and as such, the camera video performance becomes very important, so we're gonna bring everything we've learned into phones, into those devices as well. We're pretty excited about how good our technology is. Now working with Microsoft and the PC OEMs, we think the timing is right for us to try to enter that market in a bigger way. I mean, not to, and your, obviously, presence in the PC market isn't as big as the smartphone, but any thoughts on how the PC market is recovering compared to the smartphone market? Like, do you see it at, it to be a better time to intersect the PC market given the recovery there? Yeah. Honestly, from our perspective, obviously, given that we're a very, very, very small player at this point, we don't look at the size of the market as a driver. We look at the intersection point for us and the technologies that we bring to the table, and the chip we're going to have. It's really about getting the right flagship devices across the PC OEMs launched with our chip. That's what we're focused on. Size of the market is less important for us. It's really getting the right designs and getting it launched, and then consumers picking that device is what's important. Okay. Can you talk about the roadmap for NUVIA beyond the PC market? What is the priority list in terms of which end markets do you want it to hit? As we've said in the past, we're going to start with the PC market, but the CPU cores designed by the NUVIA team will be in our phones, will be in our auto market. It'll eventually end up in IoT. This is something that we think is pervasive. It'll go through our entire portfolio. It's, it brings performance advantage to us, and so we're gonna leverage it. Okay. Any questions in the audience? Maybe, Akash, then switching gears here, I mean, this is obviously the work that NUVIA is doing as a function of strategically deciding that you want to go into custom architectures and sort of move away from off-the-shelf. Can you sort of revisit why the decision to sort of go into restarting custom chip design plans and then, obviously, acquiring NUVIA? How do you see that playing out versus staying with the off-the-shelf architectures that you were sort of, for a long period of time, very happy with leveraging? We, we've had the ambition to go into the PC market. We've seen that our off-the-shelf cores, so far, we've had limited success. Apple is an example of custom ARM cores, bringing in the right performance vectors and being successful in the PC market. That was one of our motivations, is to have a CPU that's good enough for the PC market. Then, we have the technology now, we can leverage it into other areas as well. It's, it's relatively straightforward. I think we're always looking for, competitive differentiation in the performance of our cores, and this was an opportunity for us to get that. ... Okay. A lot of buzz nowadays about RISC-V, the architecture, and we get asked about it a lot, not that we can answer much what's going on, but, can it upend, hold on the smartphone market, is a question that we get. How are you thinking about it? What are your thoughts about adoption of it, and what sort of threat does it pose to your, your, your NUVIA team as well? I think over time, there is a, there is a maybe an opportunity for RISC-V cores to be used very broadly in phones. We already today use RISC-V cores in phones, in not, not, not in the main CPU, but in cores that go into our audio, video, other technology engines. RISC-V is already being used. So in the future, you can see an opportunity for RISC-V to have broader usage, into phones. We have a presence there already, and for us to be able to leverage it, if the transition happens, we'll be in a good place to do it. Okay. One of the sort of drivers of the addressable market that investors associate with Qualcomm is that you have the smartphone market and the high end of it, but Apple is gaining share in it. You have interest in the PC market, but again, the high end, Apple is gaining share, which leads investors to conclude that your TAM, or total addressable market, is also, sort of pulling back a little bit faster than the underlying markets themselves. Does it drive Qualcomm eventually to sort of look to broaden out beyond the high-end markets to more lower end, just to then have a bigger- Yeah. Total addressable market? On the phone side, we have presence across all tiers, right? Of course, we're stronger at the higher end. But we compete across every single tier, and I'm sure you have the same market share numbers that I do. We have a strong presence across all tiers. I wouldn't say that our presence in the handset market is only at the higher end. We are, of course, we have more competitive differentiation at the higher end versus others in the phones. PC is a very different story, I think. PC, to me, you can. Very large portion of the PC market is Windows, and we have the opportunity to become a significant player in that market. It's less about what% of the market Mac has versus PC, it's more about how we participate on the PC side. In some ways, kind of the success, success of an Arm-based core on the Mac side actually creates demand for us on the PC side. It might, it's something that is actually we become of interest to the PC ecosystem as itself. Do you look at these three aspects of the market, again, brand awareness, or do you feel like it's just like, oh, yeah? I mean, clearly, we'll have to invest incremental versus what we're investing today. From a technology perspective, we are already at scale in our minds, because you're largely leveraging everything you've done in handsets. Then the software investments that we have to make to enable Windows, we are already doing as well. Primarily, the incremental investment that goes in, goes in the go-to-market effort, within the PC industry. Typically, that's more scalable as well in terms of how you, how you invest those dollars, but that's, that is an area of investment for us. Which of you want gross margins in the financial markets? You feel like you have to price aggressively and, and have lower gross margins at, at the beginning? The, the most important thing for us is, how do we build volume scale within the market? Once you have the volume scale, the ability to calibrate margins is, is significantly higher, I think. That's the framework under which we operate. Before we run out of time, let's move to autos. Any updates on the pipeline of business there, and specifically, if you can dive into what's the pipeline between, like, cockpit versus ADAS? Yeah. On the last pipeline number we gave about a year ago, it was $30 billion, and we did have a pie chart. We didn't break out the specific numbers, if you look at the pie chart, you can see that ADAS was the largest portion of the $30 billion. That, that has not changed. Within the quarter, in Cristiano's prepared remarks, we talked about all the design wins that we have got within the quarter. Clearly, it's something that's continuing to accelerate. No change to our longer-term forecast that we've provided on the revenue side as well. At some point, we got away from, I think, talking through a design win pipeline every quarter, because we've established enough confidence that this is an area that we are doing well in, and we do plan to give periodic updates on it. We just haven't given as yet. Okay. On that- Yeah. The implied growth rate for auto to get from about $1.8 billion this year to $4 billion, is about 30%. Do you feel that that's front-end loaded, back-end loaded, just sort of as the growth rate? I know the absolute dollars are probably back-loaded. Well, we haven't specifically talked about kind of what our forecast is for each year, but I'd say, overall, we've kind of grown at a consistent rate across the years. In terms of timing of design wins, that you sort of when that inflection- Yeah. If you break our design wins into three buckets, first is connectivity, where we already have a lot of the design wins, and it's more about more cars getting connected. It's not a design win cycle for us. On digital cockpit, a lot of the launches happened in 2023, That's where the revenue ramp is happening right now. ADAS, we see kind of the big step up happening in 2024, 2025 time frame, That really kind of informs the forecast for 2026 and beyond. That's the, that's the, how the overlay of the three happen, and it's just a function of when we got the design wins and when the cars are launching. Even kind of when we have variances across quarters, it's more about the specific design that we had won, when the OEM finished the software work on it, and if they were able to launch on time or they got pushed out by a quarter for that reason or for supply reasons, for other reasons. It's, it's really about launching of those designs rather than some change in either design win pipeline or our pricing or something like that. You mentioned ADAS is the largest portion of- Yeah. For the $30 billion that we've shown, if you just eyeball the pie chart we showed, that's what it'll tell you. Is your autos business overall, I guess, breaking even or profitable today the way things stand? I mean, I think you've said in the past, by 2026, I believe it'll be up to margin accretive to QCT. Where do we stand today, any color there? We don't break down. I'll, I'll tell you, here's the challenge, right? The technology in some ways for the auto business is free because it's taking all the technology from mobile. Any P&L we show has to come with a bunch of qualifications. Are we just looking at incremental? Are we doing an allocation? Things like that. We've kind of stayed away from talking about it as individual P&L because that's not how we run the business. We run the business as create core technology and then apply it to different markets, and so they're go-to-market teams rather than full P&Ls, and the core technology is being created once across all these markets. I want to get your thoughts on a couple of items before we wrap up. After the quarter, given some of the challenges that you had and the Huawei headroom that you outlined, we were having conversations with long-only investors, and two topics came up in terms of what the company should be looking at. The first one being M&A, and investors understand sort of the challenges in getting some of the deals approved, but where are-- where do you stand in relation to thinking about M&A, large versus sort of maybe doing something that's more Arriver-like, and sort of more focused on diversifying the business beyond smartphone? Yeah, I mean, it, you know, our strategy historically that we've followed is how do we accelerate the organic plan? We, we did Atheros and CSR at one point, we did RF front-end at one point, Arriver, and each one of those, we were able to accelerate the direction we were going in pretty significantly. Those are the kind of acquisitions that we're, we're gonna continue to do, as we've said in the past. That's something that fits very well with us. We've obviously looked at a lot of large acquisitions as well from time to time. So far, for various strategic reasons, approval reasons, for various reasons, we've chose not to pursue it. That framework hasn't changed either. Our M&A strategy is the same. The real question is: What can we get done in this environment? More importantly, what fits into the strategy that I just outlined? Okay. The second aspect of that, which is more organic, is there a structural change in the nature of your contracts with your OEMs that can sort of make this a lot more predictable business related to the volatility that you see in customers looking to in-source or other drivers? Like, how do you think about I mean, you're obviously looking for, like, bidding for cost sockets in these phones every one, every two years. Like, how do you see longer term changing that to make it a lot more predictable for investors? Yeah. The, the industry has a structure and a process, and we're part of that process. Of course, we would love to have a longer-term relationship, with the OEMs, and there are examples where we've created that. I don't know that, the fundamental industry structure is immediately gonna change, but wherever we have the opportunity, I think we've gone and done that. Okay. Any final questions from the audience? Okay, we'll wrap it up there, Akash. Thank you. Thank you very much. Thank you, everyone.