Qualcomm Inc (QCOM)

[khemara_qc]

Verizon Wireless to Debut Qualcomm Mobile TV Service Next Year

By Peter J. Brennan

http://www.bloomberg.com/apps/news?pid=conewsstory&refer=conews&tkr=QCOM:US&sid=apflXDIu....

Sept. 14 (Bloomberg) -- Verizon Wireless, the second-largest U.S. mobile-phone service provider, plans to introduce Qualcomm Inc.'s broadcast television service for handsets early next year.

``It's proving to be very, very robust,'' Dick Lynch, chief of technology at Verizon Wireless, said in an interview. ``I'm pretty optimistic that the customer will be happy with the quality.'

Qualcomm, the world's second-largest maker of chips for mobile phones, is spending $800 million to develop the television service called MediaFLO. The San Diego-based company has had trouble attracting other U.S. carriers. Sprint Nextel Corp., the third-largest, spurned Qualcomm, saying it can get by with its own cellular network for television.

Verizon Wireless will decide later this year when to introduce MediaFLO, Lynch said yesterday at a wireless conference in Los Angeles. He predicted it could be as early as January while Chief Operating Officer Lowell McAdam told a forum at the CTIA conference the service might be ready in March or April.

``That's very good news'' for Qualcomm, said Michael Burton, a San Francisco-based analyst for ThinkEquity Partners. ``Broadcast solutions such as MediaFLO are significantly better than'' the technology now used to deliver video to cell phones.

Current video technology on cell phones is inadequate, showing jittery or halting images. Content is also hard to locate or load, media executives say.

``It's a joke trying to find content today,'' News Corp. Chief Operating Officer Peter Chernin told the CTIA conference yesterday. ``Under the right conditions, mobile entertainment is one step away from exploding.''

Obstacles

If the problems can be solved, handset entertainment could become bigger and more important than television or the Internet because more than 2 billion people use cell phones, he said.

Shares of Qualcomm fell 35 cents to $37.30 yesterday in Nasdaq Stock Market composite trading and have dropped 13 percent this year.

Qualcomm and larger rival Texas Instruments Inc. are promising their technology will deliver video on handsets at up to 30 frames per second, or typical television speed.

As many as 210 million people will watch mobile broadcasts worldwide by 2011, up from 2.56 million this year, Texas Instruments said, citing researcher Informa Plc.

Bedminster, New Jersey-based Verizon Wireless, owned by New York-based Verizon Communications Inc. and Newbury, England-based Vodafone Group Plc, was the first major carrier to adopt MediaFLO. It's also being tested by Rupert Murdoch's British Sky Broadcasting Ltd. and Japan's KDDI Corp.

Qualcomm Chief Financial Officer William Keitel said on Sept. 6 the company doesn't expect MediaFLO to generate much revenue in 2007. The company plans to spin off the unit in a couple of years, he said.

Lynch dismissed speculation that Verizon Wireless might ditch Qualcomm's MediaFLO and build its own broadcast network.

``I don't see any show stoppers,'' he said.

To contact the reporter on this story: Peter J. Brennan in Los Angeles at [e-mail] ;

Last Updated: September 14, 2006 08:26 EDT