Qualcomm CEO: WiMax Will Suffer Due To 3G Competition

Qualcomm CEO: WiMax Will Suffer Due To 3G Competition

Qualcomm Inc. Chief Executive Paul Jacobs said an alternate form of wireless Internet connection, WiMax, will "suffer in the face of competition from 3G." Jacobs criticized the quality of the connection and service delivered by the current version of WiMax. He noted that WiBro, a version of WiMax offered in South Korea, has been a "commercial failure."

Instead, he said that 3G, or third-generation wireless technology such as one called WCDMA, used by AT&T Inc. (T), can provide a better high-speed Internet connection. Qualcomm President Steve Altman said there was no progress in its royalty talks with Nokia Corp. (NOK). The companies are still working out the terms in which they license technology to each other. Nokia is seeking more favorable terms. Altman said there remain many legal clashes between the two companies.

Chief Financial Officer Bill Keitel said he expects the 2008 midpoint for gross margin is 69%. On the guidance, which some analysts have said looks disappointing, Keitel noted that in the last couple of years, the company has exceeded expectations. Part of the weaker estimate is due to the loss of licensing revenue from Nokia due to the ongoing dispute.