Qualcomm shares may gain more from Nokia deal

By Sinead Carew - Analysis

NEW YORK (Reuters) - The end of a long dispute between Finland's Nokia (NOK1V.HE: Quote, Profile, Research, Stock Buzz) and Qualcomm Inc (QCOM.O: Quote, Profile, Research, Stock Buzz) sets Qualcomm up as a key supplier of advanced wireless technology and could boost its stock price another 30 percent, according to analysts.

These analysts say investors have yet to fully appreciate the long-term benefits of the deal, which might even lead to a chip supply deal between the two companies, even though financial terms were not disclosed and Qualcomm has already seen its shares rise 20 percent in the last two days.

Even after Qualcomm's latest full-year financial forecast fell below Wall Street expectations, analysts raised their price targets on the stock this week, citing less legal risk, a possible chip deal and prospects from future technologies.

Deutsche Bank analyst Brian Modoff sees as crucial Nokia's plan to license Qualcomm patents for emerging high-speed mobile phone technologies, such as Long-Term-Evolution, which many of the world's biggest operators plan to use around 2010.

"This means that the world's largest handset vendor now sees Qualcomm's patents as essential to (next generation) standards," said Modoff, who raised his Qualcomm price target to $70 after the agreement.

Qualcomm closed at $44.82 Wednesday before the deal and was closed at $54.45 on Friday.

Qualcomm and Nokia said on Wednesday they had entered into a 15-year technology license agreement as part of a settlement ending a bitter three-year legal battle over wireless patents.

The concession by Nokia, which sells about 40 percent of mobile phones and a leading patent holder itself, that it needs Qualcomm for LTE, may mean other phone makers will have to follow.