Speculation Intensifies Over Future of Qualcomm’s Flo TV

7/23/10Follow @bvbigelow

Uncertainty concerning the future of Flo TV triggered a flurry of media reports this week pegged to Qualcomm’s recent quarterly earnings call, although the San Diego wireless giant didn’t say much beyond what it’s been saying: that it is exploring a lot of different possibilities.

As we reported during the Uplinq conference earlier this month, Qualcomm (NASDAQ: QCOM) Chairman and CEO Paul Jacobs said the company never intended to operate Flo TV indefinitely, which is why Flo TV operates as an independent subsidiary. He also noted that while a decision concerning the future of Flo TV was not imminent, it also was unlikely Flo TV will stay as it is through the next year.

Jacobs said much the same during a conference call Wednesday with analysts concerning the company’s third-quarter financial results: “With respect to our FLO TV business, we’re engaged in discussions with a number of partners regarding the future direction of the business. We are considering a number of alternatives and we will update you as appropriate.” Whatever happens with Flo TV “will get done in the next year, but I don’t think I can be much more specific than that,” Jacobs said.

The company’s options are basically to find an operating partner, sell Flo TV, or shut down the business and sell the infrastructure and licenses for the 700MHz spectrum it spent a fortune and so much time acquiring.

While Qualcomm has made it clear that the mobile TV business didn’t turn out as planned, the company is clearly looking for some way to take advantage of its existing infrastructure—such as datacasting book and magazine content to e-readers and other mobile devices. Qualcomm also announced a developer challenge that offers a $20,000 first prize for the best app that expands the multicast potential of Flo TV’s network. (The deadline for contest submissions is July 30.)

In terms of Flo TV programming, Jacobs told reporters during the Uplinq conference that “People care about news, financial, and sporting events.” Cable TV operators, he added, have shown high interest in Flo TV’s business.

Bruce V. Bigelow is the editor of Xconomy San Diego. You can e-mail him at bbigelow@xconomy.com or call (619) 669-8788 Follow @bvbigelow

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