After disappointing investors for two consecutive quarters, Qualcomm appears to have turned the tide.
Qualcomm shares were trading up nearly eight percent on Thursday morning, a day after the company reported a four percent uptick in third fiscal quarter profit. Revenue declined two percent, a shallower drop than many analysts predicted. Qualcomm also raised the low end of fourth quarter revenue guidance, giving shareholders hope that the company will deliver on expectations that, in the words of Bill Kreher of Edward Jones, it will be “the primary beneficiary of the shift to smartphones.”
At the same time, Qualcomm is looking to rid itself of its FLO TV mobile television business. As recently as April, Qualcomm was seemingly optimistic about FLO TV prospects, introducing features aimed at enhancing the service with new apps that integrate video with Web content and social media. At the time Qualcomm also implemented time-shifted viewing and pay-per-view options.
But it hasn’t been enough to offset the fact that FLO TV is available on limited devices, has spotty coverage and suffers from a dearth of compelling content.
Rather than pour money into the venture, Qualcomm is rightly focusing on its core competency of current and next generation wireless technologies. According to an analyst quoted in a Forbes.com article, Qualcomm’s focus on 3G and 4G is a “tremendous asset.”
Despite the current number of 3G subscribers, estimated worldwide to be in the hundreds of millions, there is still a “largely unsaturated market waiting to be tapped.”
That’s certainly evidenced by this summer’s backlog of the most sought-after 3G smartphones. The good news: if Qualcomm executes, it will be at the center of that enormous demand.
Lisa
