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Qualcomm to ride 3G wave for growth

By Wang Xing (China Daily)
Updated: 2009-05-20 08:12

Global communication solutions provider Qualcomm expects the burgeoning demand for 3G services in China to act as the catalyst for its future growth and profits.

Qualcomm Chief Executive Officer Paul Jacobs told China Daily in an interview that he expects China to soon become the numero uno market in terms of revenue. "I think it is likely that China will soon overtake South Korea in terms of revenue," said Jacobs.

South Korea is now Qualcomm's largest market, accounting for 35 percent of the total revenue in September last year. China, boosted by domestic telecom manufacturers such as Huawei Technologies and ZTE Corp, contributed 21 percent.

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Jacobs said telecom operators like China Mobile, China Telecom and China Unicom have launched 3G services in the past few months and promised to invest huge amounts for network construction and expansion over the next few years.

According to China's Ministry of Industry and Information Technology, the number of 3G users in the country is expected to reach 70 million within the next two years, accounting for about one tenth of China's 660 million mobile users.

Jacob said Qualcomm's chip shipments, boosted by strong demand from emerging markets including China, are set to recover from a historic low of 63 million pieces in the last three months of 2008 to around 87-92 million pieces in the second quarter of this year.

The company, which owns the technology used in 3G cell phones, has also raised its fiscal 2009 revenue outlook to a range of $9.85 billion to $10.25 billion from $9.3 billion to $9.8 billion.

According to figures from research firm IDC, global cell phone shipments slipped 15.8 percent in the first quarter of this year, impacted largely by the global economic slowdown. However, shipments of smart phones, which enable data-heavy services and applications, grew 4 percent.

Experts estimate that the entry of netbooks, with embedded 3G chipsets and Internet access through mobile networks, will give a further impetus to the chip market.

Jacob said mobile broadband is one of the new technologies that could lead the world out of the current downturn. "We are always creating new opportunities and mobile broadband is one such innovation," he said.

However, he said, with the rise of smart phones and netbooks, the ecosystem of telecom and computer industries is converging, in which "mobile phone manufacturers are going up into the computing space and computing devices coming down to the mobile space".

He said that would see Qualcomm compete with new rivals like Intel. "The problem is Intel is trying to come down, by reducing their power. We are going to scale up and increase our software," he said.