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-Published : 23/04/2009 by Caroline Gabriel-

The mobile chip market was holding its breath for quarterly results from its bellwether, Qualcomm, yesterday, but the chip giant delayed the announcement until Monday, citing "advanced settlement discussions" with Broadcom, regarding "global settlement of all disputes".

A settlement of the two chip designers' long running and multifarious patent disputes would be a strong stabilizing factor for the industry, and would remove a distraction for both sides, though would not have such far reaching consequences as Qualcomm's earlier settlement, with Nokia. That brought Qualcomm into Nokia's chip supply chain for the first time, which in itself threatened to squeeze Broadcom' s own position with the largest phonemaker.

And Broadcom could be under further pressure at Nokia, following the vendor's decision to expand its agreement with Infineon, which last year covered just low end GSM chips, into EDGE. Previously, TI and Broadcom were the only EDGE baseband suppliers. Now Infineon will provide its XMM 2130 EDGE platform which, like many Infineon offerings, differentiates itself with a high degree of integration on a single chip (also a competitive edge at Qualcomm). The XMM 2130 includes an EDGE modem, audio player, FM radio receiver and interfaces for USB connections and memory cards. According to Infineon, the high degree of integration was a major factor in Nokia's choice.

So what will Qualcomm report next week? It downgraded its own guidance earlier in the year in light of the tough economic climate but stressed that it was well positioned to ride out the storm, with a leadership position in basebands, especially in 3G and 3G+, and with over $13bn in cash and marketable securities. In recent weeks, some analysts have raised their estimates for Qualcomm, citing better cost control and stabilizing inventory. It also achieved a greater mix of revenue sources, reducing dependence on the CDMA strongholds of Korea and the US, while adding Nokia plus strengthening sales in Taiwan, partly because of pushing Snapdragon and other products into the ODM community.

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