AT&T And Qualcomm: The Glass Is Half Empty (At Least)

AT&T (T) announced that it will adopt the Qualcomm (QCOM) MediaFlow system for delivery of wireless video to its customers. Verizon Wireless (VZ)(VOD) has already signed up for the system. According to The Wall Street Journal, all of this is almost more than the competing technology from Nokia (NOK) can bear.

Qualcomm’s stock went exactly nowhere on the news. At mid-day is was up less than .4% at $38.40. The stock’s 52-week high is over $53.

So, what gives? Perhaps the cognoscenti on Wall St. know that the jury is still out on whether consumers want to watch TV on cell phones. Way out. Parks Associates predicts that mobile TV use in the US will have only a 7% penetration by 2010. Strategy Analystics has an equally dismal prediction for Europe.

There are a multitude of problems facing mobile TV. One is clearly screen size. The other is dropped signals. It is one thing to call your office after a connection drops. It is another to have missed the best part of "Survivor".

Douglas A. McIntyre can be reached at [email protected]. He does not own securities in companies that he writes about.