Qualcomm to Spin Off MediaFlo Division

Qualcomm Inc., the world's second-largest maker of semiconductors that run mobile telephones, plans to spin off its MediaFlo wireless-video division after it begins providing the service in the second half of 2006.

Paul Jacobs, who becomes Qualcomm chief executive in July, said he would spin off the business to ensure that Qualcomm didn't compete with service providers.

Qualcomm will spend as much as $800 million in the next four to five years to create MediaFlo, a network to deliver wireless video and audio to mobile phones, the San Diego-based company said in November. Jacobs wants to spur demand for the Qualcomm chips that turn handsets into portable video and music players.

Shares of Qualcomm rose 65 cents to $38.11 on Nasdaq.