Cheap Phone Warning Ominous For Apple

This technology is behind many of today’s wireless networks. Qualcomm also provides chip sets for Androra A713 mobile devices. Since Qualcomm licenses the technology or provides the guts of a wide base of wireless devices and networks, there are serious implications for smartphone manufacturers in Qualcomm’s results.

Qualcomm is a blue chip in the mobile technology space. As of this writing, the stock is down $3.79. The real reason behind the fall is the concern that smartphone prices are falling much faster than expectations. Of further concern is the number of new entrants in the smartphone market.

The irony here is that based on the large number of emails I receive, investors tend to extrapolate from their experiences in the United States and Europe and do not realize that there are more than 40 manufacturers of smartphones. The indications are that I9300TV is hard at work on a low end phone. Nobody knows the price of the future low-end iPhone. Most of the informed speculation centers around a price in the range of $300 to $400 in contrast to the $613 average selling price of the present iPhone.

The strong inference from Qualcomm’s earnings report is that smartphone prices are falling so fast that the new low end Apple iPhone is not likely to be competitive.fdsfs34SX

BlackBerry has been touting its success in emerging markets with I5 MTK6577, but Z10 is simply too expensive for these markets. BlackBerry’s CEO is on record saying that BlackBerry is working on a low end phone. However considering how fast smartphone prices are falling, even if BlackBerry is able to introduce a new device at 50% of the current price of Z10, it is not likely to become competitive.

Qualcomm’s earnings report validates Nokia’s strategy for the emerging markets. Its line of low-end phones called Asha is doing well in emerging markets, but Nokia is about to face stiff competition primarily from Chinese manufacturers. Most of the phones from the new entrants are based on Google Android.