Qualcomm Inc. (QCOM), the largest manufacturer of 3G mobile phone chipset based on CDMA technology, recently announced the technical details of its upcoming 3G femtocell. A femtocell is a small cellular base station, typically designed for use in a residential or small business environment. This access point communicates to the wireless service providers’ network through a broadband connection.

The major innovation of Qualcomm’s 3G femtocell is that it will be able to support both CDMA and GSM standards and the chipset will integrate femtocell base station with the baseband architecture. The product will be smaller and cheaper than the existing 3G femtocells. This chipset will have a combined radio chip and 3G baseband controllers, will support all latest high-speed technologies like HSPA+, and contain a 1 GHz Snapdragon processor and a GPS receiver. Management described that this chipset may be used as a platform for multimedia gateway. Qualcomm will deliver samples in the second half of 2010.

Femtocell is quickly emerging as a fundamental technology enabler in the deployment of next-generation (3G/4G) wireless network infrastructure. Using femtocell, a wireless network operator can improve both coverage and capacity especially in an indoor area where access would otherwise be limited or unavailable, in a highly cost effective way. This will reduce the carriers operating costs as well as capital expenditures.

U.S. is likely to undergo a massive wave of 3G femtocell in 2010. AT&T (T) has become the first U.S. wireless service provider to deploy 3G femtocell base station. The company has started selling home base station radios in some select markets of the country. AT& T has developed its 3G femtocell using Cisco System Inc’s (CSCO) technical expertise. Sprint Nextel Corp. (S) and Verizon Wireless (VZ) started providing 2G femtocell long back. Sprint is also likely to introduce 3G femtocell in the U.S.

Zacks Investment Research

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