Qualcomm: We want to connect everything, not just phones

January 7, 2014: 11:21 AM ET

At this year's Consumer Electronics Show, the company's strategy has little to do with the smartphones that make up most of its revenue.

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FORTUNE -- Smartphones are soooo 2013.

At this year's Consumer Electronics Show in Las Vegas, mobile chipmaker Qualcomm (QCOM) -- whose wireless components are found in the vast majority of the world's cell phones -- chose instead to talk about how its chips can be used for fledgling markets such as connected cars, wearables, and smart televisions.

The annual tech confab officially started today. On Monday, the San Diego-based company announced a series of products it hopes will entice automakers and other atypical customers to use its technology to make their products "smarter." Among the announcements: a new processor for the automotive industry; the commercial availability of AllPlay, Qualcomm's platform for streaming music across different gadgets; and new Snapdragon-branded chipsets for high-end television sets.

Why the sudden shift away from its mobile roots? It's simple. Qualcomm has the upper hand in smartphones, a cash cow it can keep milking for years to come. But it knows that growth in high-end mobile devices is already starting to wane, at least in mature markets such as North America. Ergo, Qualcomm is pushing to get its chips and IP inside all sorts of still-"dumb" objects, from washing machines to watches.

MORE: Everything is connected

Smartphones, it turns out, are just the tip of the spear. "We're seeing the trend of the smartphone leading us to growth in other industries," incoming CEO Steve Mollenkopf told the audience in a question-and-answer session in Las Vegas.

Qualcomm has a lot riding on the so-called Internet of Things, but despite years of promise the connected home is still far from reality for mainstream consumers. There are interoperability issues that still need to be worked out. (Of course, Qualcomm says it has a solution for that problem.) More importantly, the industry has yet to prove that toasters with "smarts" are better -- and worth the added cost -- than those without. Wearables, another area in which Qualcomm is investing, also has a lot to prove, despite the hype surrounding products like the new stainless steel Pebble smartwatch. And as for cars, well, let's just say this isn't the first CES that's been touted as the year connected automobiles finally make it big.

MORE: Qualcomm's new CEO: Steve Mollen-who?

Qualcomm is not the only semiconductor company trying to show off its embedded-application expertise. Rival Intel (INTC) wasn't exactly born mobile -- the company has barely made a dent in an industry that quickly grew to supplant one it dominated -- but it is already trying to prove that it's a contender in burgeoning markets like wearables and the connected home. On Monday, Intel showed off smart headsets, watches and earphones, as well as a bowl-like device that wirelessly charges the depleted batteries of mobile devices. It also introduced a new system-on-a-chip for wearables named Edison, touted as a computer the size of an SD card.

With innovations like that, who cares about smartphones anymore?

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About This Author
Michal Lev-Ram
Michal Lev-Ram
Writer, Fortune

Based in Silicon Valley, Michal Lev-Ram covers enterprise and mobile technologies for FORTUNE. Prior to joining FORTUNE, she wrote for CNNMoney, Fast Company, Popular Science and other business and technology publications. She was also a staff writer at Business 2.0 and holds a B.A. in journalism from San Francisco State University.

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