Broadcom likely in the iPhone 5C, 5S
While Apple (NASDAQ: AAPL ) investors were disappointed that the "cheap" iPhone 5C is still very much a high end, only a slightly cheaper device, the good news for Broadcom shareholders is that such a high-end device is likely using a premium Wi-Fi chip from Broadcom, as previous iPhone releases have. It's disappointing that the 5S/5C didn't come packed with NFC (which could have been an increased the dollar content opportunity for Broadcom), but the fears that Broadcom would lose this socket have largely subsided – although we will know in the affirmative once iFixit does a tear-down of the device.
while the July earnings call was less than stellar, the situation has substantially improved since then. The company made a strategic acquisition to accelerate LTE revenues into early 2014, and despite taking a writedown on its NetLogic acquisition, seems to be gaining material traction in the network processing unit ("NPU") space. I also believe that Apple's iPhone 5C launch, as well as the launch of Intel's "Bay Trail" tablet platform, will prove to be tailwinds for the company's connectivity business.
Broadcom is a classic example of a high-quality, beaten-down name with plenty of upside potential. While I believe that the company still needs to prove itself in the cellular space, and while I would keep an eye on potential market share shifts in the connectivity combo space, I'm excited by the networking opportunity and believe that if the company executes correctly, there is a multi-year growth opportunity across all of its operating segments.