Motorola Faces Chip Ban

The big event of the year -- the arrival of Apple's (AAPL) iPhone -- has already captured the market's imagination. Yet unlike so many of the new phones due out later this year, the iPhone is not 3G and so will not suffer from any holdup in Qualcomm supplies.

While fortunate for Apple and AT&T (T), this doesn't bode well for potential iPhone killers like LG's Prada phone for Verizon (VZ) and Motorola's new line-up, say analysts.

"The ramifications are significant and span not only second half phone sales in the U.S. for Motorola, Samsung and LG," Choi writes, "but also competitiveness of large carriers Verizon and Sprint (S)."

Others see a glimmer of hope if Qualcomm can sidestep this latest setback.

Qualcomm shares rose after the ban was announced as investors saw the ruling as less harmful than expected.

The reason, say analysts, is that Qualcomm is already in full legal battle mode. It is likely that the San Diego tech shop could prevail in a lengthy appeal. It also could develop a potential work-around solution to the Broadcom conflict or possibly strike a licensing agreement with Broadcom.

Motorola shares rose 14 cents to $17.83 and Qualcomm was up 75 cents to $41.77 in midday trading Friday.

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