Qualcomm Flo TV Needs Wider Adoption, More Services
By Ian King
June 16 (Bloomberg) -- Qualcomm Inc., the world’s largest phone-chip maker, needs to add electronic magazine distribution and other data services to its Flo mobile TV for the business to meet the company’s expectations, an executive said.
“If it’s only mobile TV, we’re dissatisfied, we’re not happy with it,” Bill Stone, the Flo unit’s head, said in an interview. “There are going to be a lot of revenue streams off this service.”
The service has struggled to attract subscribers partly because there aren’t enough mobile phones that offer it, Stone said. San Diego-based Qualcomm plans to expand Flo’s network’s coverage beyond the current 110 U.S. cities, get more phone manufacturers to adopt it and add TV features and other data traffic, he said. Samsung Electronics Co.’s Mythic and LG Electronics Inc.’s Arena are among phones carrying the service.
“The company needs to up its game in terms of deployment,” said Susan Kevorkian, an analyst for Framingham, Massachusetts-based IDC.
In some cases, the phone models that Qualcomm has worked with haven’t sold well and that has cut Flo’s potential market. To counter that, Qualcomm is working on more add-on gadgets that can be attached to phones, creating the ability to migrate the service from handset to handset rather than tying it to one. An example of that is the sleeve that clips onto Apple Inc.’s iPhone and acts as the antenna for Flo.
Increasing consumer interest in tablet computers following the release of Apple’s iPad in April may provide another avenue, Kevorkian said. Flo developed a Japanese-language application for the iPad and other devices that integrates live video with Internet data such as baseball statistics.
‘One or 1 Million’
Stone says the strain on mobile-phone networks caused by ballooning demand for video and data should make Flo attractive to service providers and phone makers. Flo works on a system using airwaves that Qualcomm bought in federal auctions. Flo- enabled devices have separate radios and chips that enable them to receive the service from Qualcomm’s transmitters.
“One person streaming a video takes up as much bandwidth as 100 cell phone calls,” said Stone. “Networks break down and can’t handle it. For me, whether I have one or 1 million users, it doesn’t matter.”
Distributing magazines with high-resolution pictures is another area where Flo can send content to mobile devices more effectively than wireless-service providers, Stone said. His network would broadcast the data to everyone at once, with only handsets that have subscriptions enabled to access the files.
Qualcomm created its mobile-TV unit in November 2004 and said it would invest $800 million over a four- to five-year period. The company spent $683 million to buy radio spectrum in federal auctions between 2003 and 2008.
AT&T, Verizon
AT&T Inc. and Verizon Wireless subscribers can watch broadcast TV on their mobile phones through the Flo service.
Mobile-TV subscriptions industrywide in the U.S. will rise to 30.3 million in 2013 from about 23.8 million this year, Kevorkian estimates. Qualcomm, AT&T and Verizon don’t break out their customer numbers for mobile TV.
Qualcomm, down 23 percent this year before today, fell 43 cents, or 1.2 percent, to $35.15 at 9:45 a.m. New York time in Nasdaq Stock Market trading.
To contact the reporter on this story: Ian King in San Francisco at ianking@bloomberg.net
Last Updated: June 16, 2010 09:46 EDT
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