Zoom Technologies Stock Booms After Agreement With Qualcomm

Zoom Technologies

saw its stock boom after reaching an agreement with Qualcomm Inc

to license Qualcomm's 3G technology. Zoom's stock rose nearly 50% overnight, from $3.10 to $4.60 per share in premarket trading. Zoom's boom is fueled by news that it will now develop and manufacture 3G phones for the Chinese market. "This agreement with Qualcomm is an enormous step towards our advancement in the 3G market, enabling us to produce the latest products for the dynamic Chinese market," said Leo Gu, chairman and chief executive officer of Zoom Technologies. “(We) will now develop highly competitive 3G products, such as smartphones, running on the Android operating system, setting in motion our plan to deliver a series of professional use 3G smartphones to Asia, Europe and beyond," Gu said. Zoom now has agreements in place with all three major players in the Chinese cell coverage market, including China Mobile, China Telecom, and China Unicom, according to Tina Xiao, Zoom's investor relations manager. “Zoom did a very good job in getting all three distributors,” said Xiao. This will enable Zoom to be one of only a handful of companies that can reach the entire Chinese market. Xiao estimates that it will take perhaps three months to develop the specific phones to be sold in China. “Qualcomm is one of the most important companies we could partner with,” Xiao said. “With the W-CDMA license, we are now authorized to produce 3G phones in China. It is a very good day for Zoom.” Wideband CDMA is 3G wireless standard which utilizes one 5 MHz channel for both voice and data, initially offering data speeds up to 384 Kbps. WCDMA is the 3G technology currently used in the United States by companies such as AT&T and T-Mobile. The Chinese market is dominated by China Mobile, which has roughly 70% of the cell phone service in China. China Mobile has almost 600 million subscribers, 97% of which are still using 2G technology – leaving a giant opportunity for Zoom and its new products.