Qualcomm Inc (QCOM)

[khemara_qc]

Three Wireless Picks To Gain On Continued Strength
07.13.05, 12:45 PM ET

http://www.forbes.com/markets/2005/07/13/motorola-brightpoint-qualcomm-0713markets10.html?partner=ya...

Looking at second-quarter performance in the wireless sector, S.G. Cowen
conducted a survey of over 250 U.S. wireless retailers. "Our survey confirms our positive view on continued strength in overall handset demand with inventory back at normal levels. We interpret the survey results as positive for Brightpoint (nasdaq: CELL - news - people ), Motorola (nyse: MOT - news - people ) and Qualcomm (nasdaq: QCOM - news - people ), all of which benefit from continued strength in the U.S. market and share shifts in their favor." The research firm noted that total activations for the second-quarter climbed 2.8%, a solid recovery from a seasonally weak first quarter. "Overall handset growth, increased outsourced logistics business, and a favorable inventory situation should all benefit Brightpoint." S.G. Cowen said that survey results indicated that Motorola phones were top sellers 41% of the time, the highest level in the past two years, explaining, "We believe that some of the gain is likely due to the improvements Motorola made to its product line-up at the end of 2004, adding several new clamshell camera phones and rolling out its four-letter platform with the introduction of the V3 RAZR at Cingular. The company also remains the only supplier to Nextel, a positive for Motorola given Nextel's continued growth and share gains." The survey also cited that Motorola gained share at Verizon Communications (nyse: VZ - news - people ) during the quarter. "While we believe that share gains will drive outperformance for Motorola over the next one to two quarters, we continue to look for increased competition in the second half." For Qualcomm, S.G. Cowen sees continued subscriber growth for U.S CDMA operators and Nokia's (nyse: NOK - news - people ) continued CDMA share loss as a positive. The survey indicated that activations as Sprint (nyse: FON - news - people ) and Verizon increased in the second quarter. "We continue to recommend purchase of Qualcomm for upside to 2006 consensus estimates, which we believe will be driven by a material inflection point in the WCDMA market."