TELECOM Digest OnLine - Sorted: Motorola Putting Qualcomm Chips in High Speed Phones

Motorola Putting Qualcomm Chips in High Speed Phones

Reuters News Wire (
Mon, 13 Nov 2006 13:20:14 -0600

Motorola Inc., the world's second-biggest cellphone maker, plans to
use Qualcomm Inc.'s chips in future high-speed wireless handsets the
companies said on Monday.

Qualcomm shares rose more than 3 percent after the news, which expands
its share of the market for chips based on

Universal Mobile Telecommunications System (UMTS) high-speed wireless
technology that operators in Europe and other parts of the world are
using to deliver everything from Internet and video to music and game
downloading to cellphones.

Qualcomm, the main supplier of chips based on CDMA, the most popular
wireless standard in the United States, has also been working to build
a business in UMTS chips, where it trails market leader Texas
Instruments Inc.

Qualcomm said it had incorporated the Motorola pact "as much as it
could" into the forward looking guidance it gave with its recent
quarterly report.

A Qualcomm executive said the agreement was "largely a 2008 and beyond
opportunity," during a Webcast of a meeting for analysts in London.

"For Qualcomm, the benefit is clear to us," Prudential analyst Inder
Singh said in a research note. "The company strengthens its
relationship with the No. 2 mobile handset vendor, and it adds to the
UMTS growth potential."

Singh noted that Motorola's share of the UMTS market is currently less
than 10 percent but said he expects that to improve over the next

Qualcomm shares were up $1.29, or 3.7 percent, at $36.53 in morning
trade on Nasdaq.

The companies gave no details on the value of the pact. Motorola
already uses Qualcomm's chipsets for CDMA. Freescale Semiconductor
Inc, a spin-off from Motorola which has agreed to be bought by private
investors, has been its main chip supplier to date but analysts had
long speculated about a UMTS deal between Motorola and Qualcomm.

Freescale shares were up 1 cent at $39.69 on the New York Stock
Exchange. Texas Instruments shares were up 37 cents at $29.11 also on
the NYSE.

Copyright 2006 Reuters Limited.

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