Nasdaq is up nine points to 2,463 in Monday afternoon trading, with a slew of encouraging news from the technology sector, especially good news on the cell phone front and news that federal regulators will okay the Sirius/XM Satellite merger.
Sirius is up five percent, to $2.68 while XM rose 6.4%, to $11.57. A few years ago, a Smith Barney broker told me to get in on the satellite radio “boom” but I’m glad I didn’t. The stocks of both of the satellite radio leaders have languished for years, and maybe the only hope is to have XM and Sirius meld into one company that dominates the satellite radio industry.
Lord knows that satellite radio technology works. I’m a radio buff, and love the fact that I can listen to music shows hosted by legends like Bob Dylan and Tom Petty on my XM radio. The comedy channels and BBC are pretty cool, too – all in crisp, clear sound that even FM radio can only dream about.
But paid subscriptions for satellite radio are a tough sell, especially in this economy. Why pay to listen to Sean Hannity or Dave Ramsey in crystal clear audio when, in many cases, the AM sound is fine enough?
It’s a problem that satellite radio leaders are trying to tackle, mostly by offering diversified, powerful menus of shows that appeal to a wide range of listeners. So far, it hasn’t worked. The one card that hasn’t been played is the merger card, and now it looks like XM and Sirius are ready to flip that one over.
That should happen, with the chairman of the Federal Communications Commission and the FCC staff green-lighting the merger between the two satellite-radio companies. Sirius has been trying to get approval to acquire XM in a stock-swap deal for 16 months.
There’s other good news for the tech market today, with Qualcom reporting that its revenues for the quarter ending at the end of June will be more than analysts had expected. That’s great news for the cell phone sector. Why? Because Qualcom makes a lot of the more sophisticated cell phone components that developers like Research in Motion and Apple, to name two, use in their cell phones.
Qualcom said it based its upgraded prediction on some 86 million mobile station modem chips that it expects will be shipped in the quarter.
Wall Street might be a bit thrown off by the announcement. Most analysts had expected to see a bump-up in order numbers for components in lower cost cell phones. Qualcom, which makes parts for the more advanced 3G units, is showing that the good news is spread across the board for the cell phone market.
"We are expecting another successful quarter driven by the continued global migration to 3G," said Qualcomm's chief executive Paul Jacobs, in a statement. "Our updated guidance reflects greater than expected demand for our 1xEV-DO and HSPA chipsets as well as revenues from advanced 3G network upgrades."
Qualcom saw its stock rise 5% on the news – but the entire tech market seems to be along for the ride.