Qualcomm and Alcatel Lucent Join Forces

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Jointly developed by Qualcomm Technologies, Inc. and Alcatel Lucent (ALU), multi-mode small cells will hit the market in mid-2014. Qualcomm Technologies, Inc. is the business arm of Qualcomm Inc. (QCOM).

In order to boost 3G, 4G and WiFi speed as well as to offer better network coverage, Alcatel Lucent teamed up with Qualcomm last year to develop multimode small cell sites.

Higher adoption of smartphones and tablets has increased the demand for data usage. So, the rollout of small cell base stations across residential and official areas will not only drive network speed but will also save cost and time for the company.

Both the entities have significantly contributed toward the manufacture of next-generation Alcatel Lucent lightRadio small cell products, powered with Qualcomm’s FSM9900 portfolio of small cell chipsets. Alcatel Lucent has already approached 65 clients across 42 countries with the product and has received positive feedbacks.

However, delay in the launch of multi-mode small cell products may mar Qualcomm’s growth prospects as companies like Ericsson (ERIC) and Cisco Systems, Inc. (CSCO) are on the verge of launching similar products.

Qualcomm is one of the leading manufacturers of smartphone chipsets. The company is continuously diversifying its business in order to boost top line growth as well as to stay ahead of its competitors. In the recently concluded first quarter of 2014, the company generated nearly $6.6 billion in revenues, up 10% year over year. Moreover, it shipped approximately 213 million CDMA-based MSM chipsets, up 17% year over year.

Hence, we believe that such a strong partnership with Alcatel will help Qualcomm to drive revenues going forward.

Currently, Qualcomm carries a Zacks Rank #3 (Hold).

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