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Why Private LTE Is Important to Qualcomm

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Teaming up to test private LTE systems

Qualcomm (QCOM), Nokia (NOK), and General Electric (GE) are collaborating in designing and testing LTE networks as they seek to unlock new growth opportunities. These networks are based on the unlicensed spectrum.

The motivation behind the private LTE initiative is to help corporations take greater advantage of the Internet of Things (or IoT). With private LTE, companies can create high-speed and reliable wireless connectivity in remote locations such as mines, offshore drilling platforms, and ports.

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The partners’ roles

In the ongoing private LTE trials, Qualcomm is supplying the chips for wireless connectivity while Nokia is providing base stations and cloud services that support on-demand provisioning of the private networks. GE, on the other hand, is integrating the new systems into its Predix platform, which supports digitization of industrial processes.

Qualcomm’s chip-selling operation (QCT segment) brings in the most revenues. The technology licensing business (QTL segment) provides the bulk of the company’s profits.

Unlocking a new chip market

If the market embraces private LTE networks, Qualcomm could see a new market for its chips, potentially allowing it to beat the competition and the slowdown in its primary industry. Shrinking opportunities in the smartphone market amid rising competition from Intel (INTC) and Samsung (SSNLF) could lead Qualcomm to try its luck in emerging technology fields such as connected vehicles, a segment of IoT.

Where private LTE could be adopted

Private LTE could find applications in airports, factories, and container ports where operations are increasingly based on wireless connections to improve efficiency.

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