(from Bloomberg -- a clip )
Qualcomm officials said they would comment later today.
The company may still get increased revenue from South Korea, some analysts said.
``We think that in the near term, Korea will still deploy Qualcomm's flavor of CDMA,'' said Pete
Peterson, an analyst at Prudential Volpe Technology Group, who has a ``strong buy'' rating
on Qualcomm shares. ``There is some long-term risk for control over the technology and for
their chipset sales, but the other side of that is, if you're looking for a company to develop
chipsets for W-CDMA phones, who are you going to turn to? Qualcomm makes nine times
more CDMA chipsets than anyone else combined.''
Rival Systems
Executives at the Korean companies said they chose the rival system because it's derived
from one used in more than 60 percent of the world's mobile-phone market. China and Japan
are likely to adopt the standard proposed by Nokia of Finland, Stockholm-based Ericsson and
NTT DoCoMo, too, making it more attractive to companies in Asia, officials at the three Korean
companies said. The system is now being tested by Japan's NTT DoCoMo.
``We looked at all of the trends and judged that both China and major Japanese mobile
companies will choose W-CDMA,'' said Lee Hang Soo, a spokesman for SK Telecom, Korea's
largest cellular- phone service. ``When you look at the Korean market you cannot avoid
considering what's going on in China and Japan.''
LG, Korea's third-largest business group, said it partly decided to choose W-CDMA because
its equipment maker, LG Information and Communication Ltd., has been preparing to build
network equipment based on that technology.
The Korean companies plan to take advantage of what's called roaming, the ability to use the
same handset on other networks in other countries. The Korean service providers for the
first time will be able to collect charges for this kind of service.
Fast Transmission
The European system and Qualcomm's CDMA 2000 standard both promise to transmit data,
surf Web sites, send photographs and hold video conference calls at speeds much faster
than currently.
All 26 million of Korea's mobile-phone customers use Qualcomm's technology. About 30
percent of its revenue and 50 percent of its earnings come from licensing the CDMA
standard, according to Wojtek Uzdelewicz, an analyst at Bear Stearns & Co. who has an
``attractive'' rating on Qualcomm shares.
In Korea, the end of so-called handset subsidies doubled the price of a mobile phone for
users and caused some analysts to halve their forecasts for this year's mobile-phone sales
in the country. In June, 389,000 mobile phones were sold, down 77 percent from May's total
and down from an average of 1.7 million units per month over the first five months of this
year, according to the Digital Times newspaper.
The Korean government will announce next week how it will choose the companies that will
provide the new services. It will take applications for licenses in September and will make a
decision by the end of the year. >>
quote.bloomberg.com t |
