Qualcomm buffeted by tech market

News broke last week that Verizon Wireless would pursue Long Term Evolution technology as its next-generation play, which hurts Qualcomm Inc.’s prospects. Qualcomm is proffering CDMA2000 1x EV-DO Rev. C, or Ultra-Mobile Broadband (UMB), as its next-gen technology.
Yet, earlier in the week, Verizon Wireless had said it would open its network next year to a range of devices outside its portfolio, which many analysts said would be a boon to Qualcomm, as it provides CDMA and W-CDMA chips to handset makers whose devices could run on Verizon Wireless’ network.
Meanwhile, Qualcomm is expected to benefit from the rise in worldwide, 3G handset sales, much of which rely on the company’s W-CDMA technology.
In early November, Qualcomm’s stock value had dropped on the company’s fiscal fourth-quarter earnings report, which despite solid earnings disappointed Wall Street on its guidance for the next quarter.
Soon after, however, analyst Blair Levin at Stifel Nicolaus wrote in a research note that although “the balance of power between Qualcomm and its competitors and licensees . is constantly being altered by the mosaic of legal disputes between them,” the “tide has recently turned in Qualcomm’s favor.”
About the same time, JP Morgan analyst Ehud Gelblum raised his rating on Qualcomm’s stock based on the company’s fundamentals as well as the analyst’s projection that Qualcomm and Nokia would reach a new cross-licensing agreement in arbitration. The JP Morgan report appeared to lift Qualcomm’s stock on a day in which most tech stocks languished.
Asked about the factors driving volatility in the company’s stock, Bill Davidson, senior VP of global marketing and investor relations at Qualcomm said: “If you or I really understood that, we probably wouldn’t be doing what we’re doing.”