Wireless-chip titan Qualcomm (NAS: QCOM) looks as if it'll have one less thing to worry about.
A few months back, a consortium of Asian companies was looking at forming a joint venture to make baseband chips for 4G LTE networks, which would have presented a potential threat to Qualcomm as the leading supplier of such chips.
The group included big players Fujitsu, Samsung, NEC, Panasonic (NYS: PC) , and Japanese wireless carrier NTT DoCoMo, and the venture was supposed to help the companies wean themselves off their reliance on external sources such as Qualcomm. They were working on hammering out the nitty-gritty details by the end of March, but it looks as though they couldn't come to an agreement.
A DoCoMo spokeswoman said, "The various stakeholders each had their own ideas, and an agreement could not be reached by the March deadline." So the deal has fallen through, and the venture is being abandoned. A local joint venture would have helped all of the companies by allowing them to get chips cheaper than buying from the likes of Qualcomm, but Qualcomm appears to be set to keep on keepin' on.
Last year, Qualcomm enjoyed its seat as the No. 1 baseband provider in the world, with a 43% market share. Intel (NAS: INTC) came in second with a 16% share, largely because of the wireless unit it acquired from Infineon.
Even if this joint venture had gotten off the ground, Qualcomm would have still enjoyed royalties on the technology thanks to its broad patent portfolio, although it brings in less from 4G than it does from 3G. And while this joint venture is effectively dead, Qualcomm will still have to watch out for domestic rivals such as Intel and NVIDIA (NAS: NVDA) , among others.
NVIDIA has been coming after Qualcomm pretty aggressively and is looking to integrate an LTE baseband directly into its Tegra processor this year in a direct standoff with Qualcomm's Snapdragons, some of which offer that level of integration.
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At the time thisarticle was published Fool contributorEvan Niuholds no position in any company mentioned. Check out hisholdings and a short bio. The Motley Fool owns shares of Qualcomm and Intel.Motley Fool newsletter serviceshave recommended buying shares of Intel and NVIDIA and writing puts on NVIDIA. The Motley Fool has adisclosure policy. We Fools don't all hold the same opinions, but we all believe thatconsidering a diverse range of insightsmakes us better investors. Try any of our Foolish newsletter servicesfree for 30 days.