Qualcomm has high 3G hopes but results disappoint

date: May 2, 2002

Amid warnings of lower revenues for the full year, Qualcomm has released its Q2 results showing a 60 per cent drop in earnings. Net income fell 6 per cent a share to $43.9m from last year's 15 per cent a share mark of $109.7m. Meanwhile, net revenues are also down in the Q2 results, falling 3 per cent to $696m. Pro forma revenues are at $659m compared with $717m a year ago. It seems that the company has been hardest hit by the South Korean market slump which resulted from the government's ban on operators subsidising handsets.

But Qualcomm is hopeful and expects to see an increase in business by H2 this year as more 3G networks become active around the world. It holds certain patents in the CDMA technology that will mean it will gain royalties from all 3G rollouts. Qualcomm's future bet now lies on 3G and in the very short term future on the 14 wireless operators who have launched next generation cdma2000 systems in six countries with over 7 million reported subscribers. Additionally, the company is also banking on next month's Soccer World Cup in Korea and Japan which is expected to showcase both CDMA based 3G networks in the two countries.

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