China undecided on technology selection
Only months after the Chinese Ministry of Information signed a memorandum of understanding to allow the country’s second-largest company, China Unicom, to deploy CDMA service, a Chinese newspaper reported last week the government is still deciding which third-generation technology to adopt, and it might not decide conclusively until next year.
The Chinese government was expected to declare a 3G technology choice in March.
The China Daily reportedly said China’s own technology, called Time Division Synchronous Code Division Multiple Access, was tested for the first time last Wednesday. The Chinese Academy of Telecommunications Technology and Siemens AG developed it.
This could put a major crimp in Qualcomm Inc.’s plans to eventually deploy cdma2000 on a broad scale and rake in the millions that would come from licensing fees and chipset revenues, but it’s also highly likely cdma2000 will be just one of several 3G technologies deployed in China, including wideband CDMA, GSM and now possibly TD-SCDMA.
China had an estimated 85 million mobile-phone subscribers at the end of 2000.
Immediately following the news, Qualcomm Inc.’s stock dipped about 7 percent last Thursday to $47.64, but had recovered to $53.04 on Friday, up $1.95 from Thursday’s close.
In other news in Asia, Singapore cancelled its 3G mobile-phone auction after Hong Sunday Communications withdrew from bidding, leaving only three companies and four licenses.
RIM surpasses estimates
No sour grapes for Research In Motion as the maker of the popular Blackberry handheld wireless e-mail device posted a fourth-quarter result that surpassed market estimates.
The Canadian manufacturer said its fourth-quarter earnings jumped $8.3 million, or 10 cents a share, before one-time costs, from $3.2 million, or 4 cents a share for the same period last year. The company said it had a loss of $6.5 million, or 8 cents a share after the charge of $14.75 million.
RIM’s revenue leaped to $90.1 million, almost four times the same period last year when it recorded $25.8 million in revenues.
This report contrasted with handheld leader Palm Inc. , which slashed the prices of some of its product to induce demand.
Blackberry, a constant companion of Wall Street executives, attracts 164,000 subscribers from about 8,000 companies. RIM had a 46-percent gain compared with the third quarter.
Full-year revenue rose 160 percent to $221.3 million.
In spite of the rosy picture and applause from much of the analyst community that attracted ratings from buy to strong buy, Credit Suisse First Boston cut its 2002 financial outlook. It cited the company’s lack of visibility.
First Boston said it was “somewhat cautious with regards to $15 million in revenue upside during the quarter, as it is largely attributable to a large volume of shipments to AOL Time Warner Inc., where end-demand visibility is unclear.”
The company’s shares closed at $28.27 last week, a rise of 29 percent.
UBS Warburg upgraded its shares from buy to strong buy while J.P. Morgan from LT buy to buy.
