Qualcomm Climbs on iPhone Rumor

Shares of Qualcomm rose Tuesday following a report that says Apple is planning a CDMA iPhone.
Author:
Publish date:

Updated with responses from Qualcomm and Verizon.

NEW YORK (

TheStreet

) -- Shares of wireless chipmaker

Qualcomm

(QCOM) - Get Report

rose in early trading on Tuesday following a

Wall Street Journal

report that

Apple

(AAPL) - Get Report

is planning a CDMA version of the iPhone

that could run on

Verizon's

(VZ) - Get Report

network.

Citing people briefed by Apple, the report said that the tech giant is developing the device to run on other networks in the U.S. besides

AT&T

(T) - Get Report

, which has maintained iPhone exclusivity in the U.S. since the product's launch in 2007. In addition, sources told the newspaper that Apple is planning a separate iPhone model update that is likely to be thinner and have a faster processor.

The Journal

also reported that the new CDMA iPhone could make its debut later this year.

Qualcomm

, which

manufactures CDMA chips

, would be a likely candidate to provide silicon for a new iPhone. The rumors have pushed the company's stock up 54 cents, or 1.53%, to $42.40 shortly after market open. This outpaced the modest advance in tech stocks that saw the Nasdaq rise 0.49% in early trading.

Talk of a possible

Qualcomm/Apple iPhone

deal has rattled around the blogosphere for months -- such a deal would significantly boost the chipmaker's business.

During Apple's recent first-quarter results, iPhone shipments climbed a massive 100% compared to the same period last year, helping grow the company's overall revenue by more than 30%. Apple has not yet revealed its long-term phone strategy.

Qualcomm declined to comment on this story when contacted by

TheStreet

.

Qualcomm, which already supplies CDMA chips to

Samsung

and

LG

,

recently raised its profit and sales guidance

, citing strong licensing performance and growing chip revenue.

Despite all the rumors swirling around the iPhone, some analysts and experts think that a

Verizon iPhone is unlikely to happen this year

.

Last month, for example, multiple industry sources and Wall Street analysts said that the iPhone may be

staying exclusively at AT&T

for longer than expected.

AT&T relies on a GSM network, whereas

Verizon

and

Sprint

(S) - Get Report

use CDMA technology, hence the potential opening for Qualcomm. Verizon also has been wielding its network coverage as a cudgel in a slew of TV ads targeting AT&T.

"There is undoubtedly enormous pent-up demand for the iPhone on Verizon's superior network," wrote Craig Moffett, an analyst at Bernstein Research, in a note released on Tuesday. "iPhone availability will therefore mean an immediate acceleration for Verizon's subscriber growth and, conversely, immediate share losses for AT&T."

Verizon declined to comment on this story. Apple has not yet responded to

TheStreet's

request for comment.

-- Reported by James Rogers in New York

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