FLO TV features simulcast and time-shifted broadcast content from partners including ABC, CBS, NBC, Fox, ESPN, MTV and CNN. Subscriber numbers are unknown. Initially available only in limited markets, FLO TV went nationwide in mid-2009 in conjunction with U.S. broadcasters' long-planned transition from analog to digital, which freed up the necessary spectrum. Qualcomm reportedly spent $683 million acquiring the spectrum to run FLO TV, stating it would invest about $800 million in total (including spectrum, network build-out and marketing costs) to launch the service. Gleacher & Co. analyst Mark McKechnie forecasts the FLO spectrum could fetch as much as $1 billion on the open market: "It's got to be worth more now; they got that spectrum before the [Apple
Last month, Qualcomm confirmed reports it will shutter FLO TV, halting direct-to-consumer sales of new devices but committing to delivering programming to existing subscribers through the spring of 2011. Qualcomm said the white-label FLO TV services offered by AT&T and Verizon Wireless remain unaffected, at least for now. "In the event of a discontinuance of service, FLO TV will make appropriate refunds, the details of which will be communicated prior to discontinuation," the company said. Qualcomm expects its exit from the FLO business to incur charges between $125 million and $175 million in fiscal 2011.
Qualcomm first acknowledged plans to divest FLO TV in late July; Jacobs said at the time the company was exploring "a number of alternatives" for the unit, including discussions with prospective partners. At Qualcomm's Uplinq 2010 developer conference in San Diego a few weeks prior, Jacobs explained it was never the firm's intention to become the service provider operating the FLO broadcast network.
Apple is a Motley Fool Stock Advisor recommendation. The Fool owns shares of Apple and QUALCOMM. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.