Qualcomm Inc (QCOM)

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Qualcomm talks up mobile TV, reveals trials Thu May 5, 5:46 PM ET

http://news.yahoo.com/news?tmpl=story&u=/nm/20050505/tc_nm/telecoms_qualcomm_dc_3

NEW YORK (Reuters) - Qualcomm Inc. (Nasdaq:QCOM - news), a provider of chips and technology licenses, said on Thursday it is testing television programing for mobile phones with TV providers such as news network CNN, ESPN and Court TV.

Qualcomm, which plans to spend about $800 million to build a network to broadcast TV to phones next year, expects video on phones to be the most popular advanced mobile service, incoming Chief Executive Paul Jacobs said at an analyst meeting.

"Interest in video far outstrips any other feature," said Jacobs, who sees TV phones becoming more popular among consumers than already well-liked features such as cameras.

Wireless operators around the world are spending billions of dollars upgrading their networks to deliver services such as video and music to phones in the hope that revenue from these services will make up for falling mobile phone call prices.

Jacobs, which expects to spin off Qualcomm's TV network MediaFlo after it is up and running, had told Reuters in March that Qualcomm had signed agreements with content partners for the network. He did not identify the partners.

Qualcomm is now in trials with ABC News, Court TV, owned by Time Warner and Liberty Media Corp (NYSE:L - news), the privately held Weather Channel and A&E, owned by Hearst (NYSE:HTV - news) and units of Disney and General Electric (NYSE:GE - news), as well as MLB.com, the Web site for major league baseball.

It is also working with Music Choice, a partnership of several technology and media firms. CNN is owned by Time Warner Inc (NYSE:TWX - news) and ABC and ESPN are owned by Disney (NYSE:DIS - news).

Qualcomm dominates the market for chips used in CDMA phones -- popular in the United States and parts of Asia -- but it only has a small share of the chip market for W-CDMA phones, used across Western Europe.

It sells W-CDMA chips to three of the world's biggest six mobile phone makers but not to the biggest two manufacturers Nokia (NOK1V.HE) and Motorola, which account for almost half of the world's mobile phone sales between them.

One executive said Qualcomm hopes to sign on one more top tier handset maker but noted that most of its negotiations to this end had been with Motorola, which already uses Qualcomm chips for CDMA phones.

Also during its investor conference Qualcomm said it plans to continue using stock options to compensate its employees after it begins accounting for them as an expense in its first fiscal quarter, ending in December.

Qualcomm sees countries such as China as key for its future growth as the Chinese government is expected to hand out new licenses to wireless operators for high-speed data services.

But Qualcomm executives said on Thursday that they now expect China to award new licenses at the end of this year instead of around the middle of 2005 as it previously hoped.

The company's shares closed down 49 cents, or more than 1 percent, at $35.16 on Nasdaq on Thursday.