Qualcomm has positioned itself as the toll-collector for 3G, which will come in two flavours:
CDMA2000 in the CDMA world and WCDMA among the GSMers. Writes Fortune:
Qualcomm used to manufacture both handsets and network equipment, but by 2000 had sold off both businesses to Kyocera and Ericsson, respectively. Those moves have left Qualcomm with two big-money businesses that provide 84% of its $3 billion in annual revenues and 98% of its $360 million in earnings: CDMA chipsets for cellphones (Qualcomm designs the chips and outsources their manufacture) and technology licensing. Since Qualcomm owns many of the core processes that make CDMA cellular systems work, anyone who wants to get into the CDMA game will at some point have to pay up. That’s translated into healthy 12% net margins in an industry known today mostly for its financial wreckage.
If Qualcomm does nothing in a 3G world but license its technology, it thrives. If it does that and continues to sell a lot of chipsets for all those new phones–whether they’re for the U.S. or Europe or anywhere else–it thrives even more. And the best case of all? That we all turn Korean.
South Korea has been the leader in 3G rollout. Much of the coming action is now going to be in China. In India, Reliance is rolling out its CDMA-based mobile telephony services across the country. Plenty of opportunities for Qualcomm.
In the same issue of Fortune, Stewart Alsop provides a user’s perspective on the power of these new phones:
The next-generation cellphones will lead to what might be called the convenience revolution. Play interesting games when you’re bored. Find out about the weather or traffic right where you are, right when it matters. Locate that new store you’ve heard about while you’re walking around downtown. To be honest, half of what we do with personal computers now no one really foresaw back in the early 1980s. And I can’t tell you half of what cellphones will do for us in the year 2010. But I can tell you I’m excited about the possibilities.