Qualcomm's (QCOM) Benefit Nokia (NOK), Sony (SNE), Ericsson (ERIC) Overstated Says BMO

The benefits to Qualcomm (QCOM) from the joint venture between Nokia (NYSE:NOK), LG Electronics (LGERF), Sony (NYSE:SNE), Ericsson (NASDAQ:ERIC) are being overstated in the view of BMO Capital’s Tim Long, who cut his rating on the company as a result.

Long said he sees lower royalty payments than expected, and also cut his price target on Qualcomm.

Other pressures on Qualcomm will come from makers of tablets, in Long's estimation, as he sees Apple’s (AAPL) success and that of Samsung (SSNLF) and HTC with their Google (GOOG) Android-based phones affecting the company, as prices are pushed down.

"We see secular weakness from the Japanese OEMs due to strong Smartphone sales from Apple, Samsung and HTC in the domestic market. This has forced the Japanese OEMs to develop and sell Android devices that have lower ASPs than the feature phones they had previously offered. We believe the transition to Windows Phone 7 will hurt Nokia, while the Sony Ericsson new products are later than we expected. Last, we believe new tablet entrants have had a tough time getting product out, said Long.

BMO Capital cut its rating on Qualcomm from "Outperform" to "Market Perform." Qualcomm was trading at $57.30, down $0.28, or 0.49 percent, as of 1:40 PM EST. BMO lowered its price target on the firm from $65 to $56.