The two largest emerging markets of the world, China and India have become the major growth driver for Qualcomm Inc. (QCOM). Despite being the largest CDMA mobile chipset developer of the world, the company is facing reverses in its top-line growth during 2009. Ongoing global economic recession that resulted in significant reduction of demand for mobile handsets is the primary reason for this disappointing performance.

At this juncture, China and India are a silver lining for Qualcomm. Explosive growth of China’s home grown 3G (TDS-CDMA) technology has enabled Qualcomm to make up its losses in the developed nations. The three Chinese giants, namely China Mobile Ltd. (CHL), China Unicom Ltd. (CHU), and China Telecom Corp. Ltd. (CHA) together serve a massive 730 million mobile customers. Nearly 10% of these are 3G subscribers.

The rapid development of the 3G industry in China has thrown open a major opportunity to CDMA equipment manufacturers. China now contributes almost 23% of Qualcomm’s total revenue. Growing market traction of 3G wireless devices in India is also likely to spur growth of Qualcomm. At present, India has more than 100 million CDMA wireless subscribers; out of which half a million are 3G subscribers.

Currently, Reliance Communications and Tata DoCoMo, a joint venture between Tata Teleservices and NTT DoCoMo (DCM) are the two main CDMA service providers in India. In addition, the state run BSNL, the largest telecom operator in the country and Sistema- Shyam Teleservices are also opting for CDMA2000.

According to GSMA and CDG’s latest data, more than 80% of the global telecom operators have begun to provide 3G-based services, and the total number of 3G users has reached 885 million, a growth of over 29% compared to 2008. Global CDMA subscriber base is expected to cross 1 billion by 2010.

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