Wireless Phone Flaw Hits Qualcomm Shares
Shares of Qualcomm Inc., one of the world’s largest makers of wireless phones, fell 4% on Friday amid concern that a problem with one of the company’s most popular phone models will hurt sales. Sprint PCS, one of San Diego-based Qualcomm’s biggest customers, said it stopped selling Qualcomm’s “Q†phone because of cracks in its plastic casing. Even so, analysts said they weren’t expecting strong “Q†phone sales until next quarter, when a new model for both analog and digital wireless networks is unveiled. Sprint PCS returned all of its “Q†phones to Qualcomm and plans to buy a new model that will be released in a few months, said Tom Murphy, a Sprint PCS spokesman. The phones were covered under warranty, and Qualcomm Treasurer Richard Grannis said the costs of the return will be taken out of the company’s warranty reserves and aren’t expected to require further charges to earnings. Sprint PCS is a joint venture among long-distance provider Sprint Corp. and cable companies Tele-Communications Inc., Comcast Corp. and Cox Communications Inc. Qualcomm shares fell $2.25 to close at $54.13 on Nasdaq.
