Qualcomm: AT&T to Use MediaFLO for Mobile TV, But Will People Watch It?

When people ask me about the coolest things I saw at the recent Consumer Electronics Show, one of the things I always mention is the Verizon (VZ) Wireless demo of its soon-to-be-launched mobile television service, which uses technology and service provided by Qualcomm’s (QCOM) MediaFLO service.

MediaFLO operates on a separate radio signal, rather than on a cellular signal; instead, it uses nationwide radio spectrum owned by Qualcomm. The result is a very impressive television experience on a phone, with 20-24 channels and rapid channel changing of live TV. It really is pretty cool, although there are plenty of reasons to be cautious: you need to buy a phone that can receive the MediaFLO signal, phones in general have small screens, and it is not entirely clear how much people will want to watch TV on their phones.

OK, so that’s all prelude to yesterday’s news, which is that AT&T (T) is going to offer MediaFLO on Cingular (which is gradually going to turn into AT&T Wireless…but that’s another story). The service is supposed to launch late this year. No pricing was announced; Verizon hasn’t announced pricing yet, either.

Inder Singh, an analyst at Prudential, says MediaFLO “could be a long-term growth driver for Qualcomm,” although not a revenue contributor yet.

Albert Lin, an analyst at American Technology Research, contends the news is “a huge positive,” since previously Verizon was the only announced customer. “QCOM’s ability to sell more FLO enabled chipsets, revenue share and royalties is greatly enhanced with this development,” he writes in a research note.

Not everyone is convinced. Blogger Douglas McIntyre contends the jury is still out on whether consumers want TV on their cell phones. Pricing could be one issue; I suspect the need to buy new handsets will be a bigger one. Nonetheless, having played around with the service a bit, I can tell you that it looks pretty compelling - more than you would expect watching TV on a phone.

Qualcomm yesterday was down 16 cents at $38.15.

QCOM 1-yr chart

Comments

[Sr. Pessimist:]

Where are they getting their content? Big Media? That's the question I'd like to ask before I question if people will watch it. My reasoning, as a gut feeling, could be classified as intellectual property, because I'm starting to trust in my clairvoyance into psychology and business concepts.

2007 Feb 13 07:41 PM