Today is bright; what about the future?

I guess everyone in Europe is familiar with the Orange slogan about the future being bright. But is it bright for Qualcomm (QCOM?)

It seems that QCOM is currently cashing in on its investment in CDMA but investors are worried about next year and what QCOM will sell in ten years times.

Next April QCOM's licensing agreement will run out. No renewal agreement has been reached yet and it looks like one is unlikely. Not receiving royalties from Nokia would reduce the quarterly EPS by 4 to 6 cents. Ouch.

The other worry is what comes after 3G? Operators and OEMs around the world are desperate for a technology that does not involve QCOM patents as QCOM has such a monopoly on CDMA. Life at the top is becoming increasingly lonely for QCOM.

Thirdly QCOM's legal bill is becoming so signficant that it is having to hold back on its share repurchases for a while. Big ouch. It looks like the lawyers will be the ones cashing in on QCOM next year, not investors.

The future feels very uncertain for QCOM at the moment. It is throwing off healthy amounts of cash at the moment but some of that is having to be reserved for legal bills. It is hard to get a clear picture of what this company could do in the next 5 years. However there are lots of very bright people at QCOM - lets hope they can navigate around some of these obstacles and give investors something to cheer about.