Shares in Qualcomm Inc. (Nasdaq: QCOM) were down another 8 percent Wednesday as news that the company's mobile phone technology will not be adopted in China sunk in.
Qualcomm, which has been battered down about 56 percent since January, was one of Wall Street's highest-flying stocks last year. Shares were down 7 to 69 3/8 Wednesday, and the stock was the most actively traded on the Nasdaq.
The shares are at their lowest level since November. They have lost almost two-thirds of their value since a record close in January, despite the fact that the company beat estimates in its second quarter, and had a bullish outlook.
The shares were hit when China Unicom, China's No. 2 state telephone carrier, said it would not adopt Qualcomm's current-generation code division multiple access (CDMA) wireless standards.
Analysts quoted China Unicom executives as saying on Monday in Hong Kong that they had no reason to use the CDMA standard for now. The executives made their comments at a presentation kicking off a road show for a stock market listing.
Qualcomm had expected to grab a big piece of China's market when it signed a CDMA royalty agreement with Unicom in February.
Unicom's estimated 7 million subscribers currently use the competing Global Standard for Mobile Communications (GSM) wireless standard. Industry sources said it made little sense for China Unicom to use a current-generation CDMA network to compete with its GSM business -- especially with more advanced technology coming soon.
CDMA technology takes information in a signal and spreads it over a wide bandwidth. This allows telecommunications operators to carry more phone traffic than GSM.
While the China trade pact has been good news for many tech stocks, especially telecommunication companies such as Ericsson (Nasdaq: ERICY), Nokia (NYSE: NOK) and Motorola (NYSE: MOT), it could be a mixed bag for local companies, and the companies they already have contracts with.