Emerging markets' 3G rush drives Qualcomm growth

09:07, May 13, 2010      

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US chip maker Qualcomm Inc said on Wednesday that 3G demand from emerging countries, especially China, was the major driving force behind the company's business during the economic downturn.

The company also expects more partnerships with Chinese technology manufacturers such as Huawei Technologies Co Ltd, ZTE Corporation and Lenovo Group as they more actively expand across the world market.

Bill Davidson, Qualcomm's senior vice-president responsible for global marketing and investor relations, said emerging markets such as China and India were the source of the company's growth during the past few quarters.

"In developed markets such as Japan, South Korea and more increasing in the US, the demand is more about replacement because we have had 3G there for some time," said Davidson.

He said countries like China present wonderful opportunities for 3G growth, as most of the population still lacks mobile access to the Internet.

According to figures from the Ministry of Industry and Information Technology, 3G users increased to 18.08 million by March, after the service was kicked off last year. That roughly accounts for nearly one fifth of the world's total 3G population.

Davidson also said China's increasing base for 3G users is vital for the development of the world's 3G industry, as China's huge user base will help drive down product prices.

"According to our experience, a doubling in product volume will result in a 20 percent reduction in product price," he said.

Last month, Qualcomm reported a fiscal second-quarter profit of $774 million, compared with a loss of $289 million in the year-earlier period. Revenue rose to $2.7 billion from $2.45 billion.

Davidson said that the economic downturn could impact the world's transition from 2G to 3G, which enables the use of data-heavy services on cell phones. But in the long term telecom operators are unlikely to increase their investments in 2G.

As the chip supplier for Amazon's popular Kindle, Davidson said Qualcomm is interested in China's booming e-book reader market, because it can provide both chipsets and screen technology.

Source: China Daily


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