Broadcom reportedly scores LTE baseband wins in challenge to Qualcomm
1 HOUR AGOBRCM, QCOM
JPMorgan reports Broadcom (BRCM +1.6%) will ramp shipments of 4G baseband chips to Samsung in Q1 for use in mass-market phones, and has also scored 4G baseband wins with another top smartphone vendor.
The report comes as Broadcom gets ready to begin selling its BCM21892 4G baseband (first announced in February), and works to integrate Renesas' 4G baseband ops (acquired for $164M).
Any 4G share gains by Broadcom would likely come at Qualcomm's (QCOM +0.1%) expense. Qualcomm had a 97% 4G baseband share earlier this year (per Strategy Analytics), and just announced a new baseband modem that leverages TSMC's next-gen 20nm manufacturing process.
Investors have already expected Qualcomm's 4G baseband share to fall some in 2014, thanks to fresh competition from Broadcom, Intel, and Nvidia.
The JPMorgan report is a breath of fresh air for Broadcom investors, given the company's disappointing Q4 guidance was partly due to baseband weakness.
China Mobile could easily add over $3 in EPS in the first year
Overall I believe Apple could fairly easily sell 15 million iPhones in the first year. This would only be 8.5% of China Mobile’s 3G install base which is only slightly higher than the estimated 6% to 7% share that Apple has of the entire Chinese smartphone market. At 15 million iPhones with an ASP of $550 they would generate $8.3 billon in revenue and add 4.5% to Apple’s revenue growth in the first year.
It is estimated that the iPhone’s gross margin is somewhere between 45% and 50%, the highest of any of Apple’s hardware product lines. At the mid-point of 47.5%, which is also what Milunovich estimates it to be, there would be an additional $3.9 billion in gross profit generated.
Assuming there is essentially no incremental R&D cost and 2% of the revenue goes to Selling, General & Administrative (SG&A) expenses (vs. 6.3% for the company in fiscal 2013) there would be an additional $3.8 billion in operating profit generated.
Using the corporate tax rate of 26.25% (which is probably too high but lets be a bit conservative) and a share count of 900 million there would be $3.15 in additional EPS. This would generate 8% EPS growth on last year’s EPS of $39.76.
Note that for every 5 million iPhones Apple would generate an $2.8 billion in revenue and $1.05 of EPS.
I don’t expect an update to guidance
There has been some chatter on various on-line boards that Apple may update its guidance when a China Mobile deal is announced. The two scenarios that may drive Apple to do this is if their sales are doing so well without China Mobile that they can clearly see that they will exceed the top end of their $58 billion in revenue guidance and 37.5% gross margin or that China Mobile has committed to buying so many iPhones by December 28, the end of Apple’s quarter, that it again bumps the numbers above guidance.
Maybe December 18, if that winds up being the date, is late enough in the quarter but unless the company has such good visibility the last thing they would want to do is update guidance and either fall short (very bad) or exceed it even further (just bad). There is very little to no upside to do this with ten days to go in the quarter. Note that when they did it in September (which is the first time I can remember management doing this) there were only 5 days left in the quarter and they didn’t have the wildcard of holiday sales.
The latest indication that a deal between Apple and China Mobile has finally been struck comes from the Wall Street Journal with the iPhone expected to be available starting on December 18. What may not be clear until then is that the announcement of the deal, the first day they can be ordered or possibly picked up in a store, which I doubt due to the riots that occurred almost two years ago when the 4S was launched in January 2012. (Note that my family and I own Apple shares).
China Mobile had 759 million users at the end of October and has been adding about 5 million additional users every month for the past 4 and a half years. It has 176 million using 3G technology (23% of its base) and has been adding almost 7 million a month over the past year.
In comparison China Unicom has 276 million total customers with 115 million on 3G technology (42% of its users) and China Telecom has 183 million total customers with 99 million on 3G technology (54% of its users). I have developed a Google Doc with the three carriers user numbers going back to June 2009 which is available via this link.
How much revenue could a China Mobile deal generate?
Various analysts estimate that Apple has about a 6% to 7% share of the Chinese smartphone market. There have also been various reports that there are already between 25 million to 35 million iPhones that have been hacked to work on China Mobile’s network. While this shows there is demand for the iPhone it could limit the number of buyers in the first year if they bought it recently. Or it could have a very positive affect if those users want to upgrade and can sell their iPhones.
Steve Milunovich from UBS estimates that Apple could sell more than 10 million iPhones in the first year and when he upgraded the shares on December 3rd he added 5 million iPhones to his estimates based on a partnership being in place. He also noted in his report that most of the iPhones used in China are bought in Hong Kong to avoid a consumption tax. That could very well be the reason that ordering the Gold version of the iPhone 5s was showing “Currently Unavailable” on Apple’s Hong Kong website until almost two months after it first became available. You can see what the lead-times have been for the 5s via this Google Doc I have created.
Milunovich estimates that the Chinese carriers subsidize about $550 per iPhone. If Apple were to sell an iPhone to the carrier for $550 (less than the $577 ASP in the September quarter) it would generate $5.5 billion in incremental revenue or an additional 3% revenue growth.
Gene Munster from Piper Jaffray estimates that Apple could sell 17 million additional iPhones in the first year (essentially calendar 2014) with an Average Selling Price (ASP) of $525. This would generate $8.9 billion of revenue which would generate an additional 5% revenue growth.
A report on Wednesday claims Apple and China Mobile have finally inked a deal to sell the popular iPhone on the world's largest wireless network, with devices supposedly heading out to customers later in December.
Citing sources close to the matter, The Wall Street Journal reports that Apple and China Mobile have struck a deal to make the iPhone available to the telecom's 740 million subscribers.
The partnership has been a long time coming, with rumors of a possible China Mobile iPhone offering dating back years. Most recently, a China Mobile subsidiary in Suzhou opened preorder reservations for both the latest iPhone 5s and iPhone 5c through its website, though the page was subsequently replaced by a survey gauging customer demand for 4G devices.
With China Mobile's unique TD-LTE network rollout coming in mid-December, many industry watchers expected sales for Apple's smartphone to go live this month. A report from the state-run Xinhua News Agency in November cited insiders as saying both new iPhone models would, in fact, be available on the 4G network's official Dec. 18 launch date.
China Mobile is the largest cellular carrier in the world, with some 740 million subscribers spread across the Chinese mainland, Hong Kong and overseas. Of that massive number, only a fraction are 3G subscribers who would likely be the first to adopt faster, more expensive 4G technology. Even so, Apple is looking at well over 100 million potential customers at the outset, with the chance to tap into hundreds of millions more down the road.
China Mobile has finally signed a deal to offer Apple iPhones on its network, an agreement that took years to reach, reports the Wall Street Journal. China Mobile is the world’s largest mobile carrier, with more than 700 million subscribers, and is the last of China’s three major carriers to offer the iPhone. We have emailed Apple and China Mobile for more information.
The reported deal comes after two months of signs that the rollout of iPhone’s on China Mobiles network is imminent. The launch date is expected to coincide with the Dec. 18 China Mobile conference in Guangzhou, when the carrier is supposed to reveal more information about its new 4G LTE network.
In September, the WSJ reported that Apple is preparing to ship the iPhone 5S and 5C to China Mobile and earlier this week, China Mobile began quietly taking pre-orders for both models on a website owned by one of its subsidiaries.
China’s top three carriers recently received licenses from the Ministry of Industry and Information Technology to start operating 4G networks. In September, reports emerged that Apple’s newest iPhone models will be compatible with China Mobile’s network. The completion of its 4G network was an important sticking point for China Mobile to agree to start selling iPhones. One of the major roadblocks was that China Mobile operates on a different 3G standard that was developed in part by the Chinese government, and Apple said that the carrier’s proprietary network as too unreliable. China Mobile, on the other hand, did not want to agree to Apple’s sales volume guarantees.
China is currently Apple’s third biggest market and CEO Tim Cook has said he anticipates it will eventually become the company’s largest. But over the past year, Apple has quickly lost market share there to Android handsets from Samsung and domestic handset makers, as its revenue also slowed down in the U.S. But deal with China Mobile may give it a boost. Research firm Trefis says the deal with the carrier may result in the sale of an additional 20 million iPhones in 2014, a 17% increase from the year before.
Features 5.7 inch HD display, 13 MP camera with Flash and advanced wireless connectivity
News | CIOL Bureau
IRVINE, USA: Broadcom Corp. announced that G'Five, a leading consumer electronics company and OEM in China, has selected Broadcom's quad-core HSPA+ smartphone platform for its new WG5701 Android smartphone.
With the integrated capabilities available in Broadcom's complete platform, such as advanced Videocore multimedia, market leading Wi-Fi and multi network satellite positioning technology, G'Five has delivered an affordable smartphone boasting an array of advanced wireless connectivity technologies and features.
According to a recent report from The GfK Group, the sale of smartphones in Southeast Asia grew 61 percent in the past year. Much of that growth was driven by the availability of affordable smartphones priced between $100 to $200 dollars.
G'Five's WG5701 capacitive touch smartphone, powered by the Broadcom smartphone platform, provides consumers with a 1.2-GHz quad core processor, 5.7" HD (1280x720) IPS display, rear 13 megapixel (MP) camera with flash, front 3 MP camera capabilities, and 2G/3G dual SIM dual standby-all at an affordable price point.
"Our customers are demanding distinctively designed, multimedia-rich smartphones that will enhance their quality of life without adversely affecting their wallets," said Zhang Zhixue, G'Five's CEO.
"The integrated capabilities of Broadcom's platform deliver the graphics-rich multimedia experience and performance at a price consumers want. Our customers can now easily stream and share video, photos and gaming applications on a larger display, and more easily multitask; significantly enhancing their user experience."
"In the China smartphone market, where affordability is the primary driver for smartphone growth, today's OEMs require a complete turnkey solution to speed their Android smartphone production, while minimizing overall development cost," said Michael Civiello, Broadcom senior director, Mobile Platform Solutions.
"Our integrated turnkey smartphone platform is enabling companies like G'Five to bring the benefits of wireless technology to the masses by delivering compelling products with the latest advances in wireless connectivity at a low price point."
Smartphone chip vendors step up development of 64-bit quad-core solutions
Cage Chao, Taipei; Steve Shen, DIGITIMES [Friday 29 November 2013]
Handset chip vendors including Qualcomm, Nvidia and Broadcom are reportedly set to roll out 64-bit quad-core solutions for smartphones during the first half of 2014, according to industry observers.
The planned 64-bit quad-core smartphone chips are expected to debut at CES 2014 at earliest, said the sources.
Although MediaTek has landed 8-core CPU orders from first-tier and second-tier China-based smartphone vendors, international smartphone brands are still conservative about the 8-core chips. Instead, international players are more concerned about the 64-bit A7 processor used in the iPhone 5s and are mapping plans to catch the iPhone 5s in terms of hardware specifications, revealed the sources.
To cope with demand from smartphone vendors, Qualcomm, Nvidia and Broadcom reportedly have revamped their product roadmaps for 2014, aiming to release 64-bit smartphone solutions in the first half of 2014, the sources added.
Since MediaTek has been focusing on 8-core chips recently, the Taiwan-based chipset provider may delay the launch of its 64-bit CPUs to the second half of 2014, the sources noted.
November 28, 2013 • By Stasys Bielinis
To lower production costs, HTC is moving aggressively away from Qualcomm as a single CPU supplier, choosing chips from ST-Ericsson, Spreadtrum and Broadcom to run 3 new Desires launched yesterday. It has also completed negotiations with Warburg, Arima to outsource low-end device manufacturing. Small scale trial production will start in the first half of 2014, with the goal to identify further areas of cooperation.
When HTC One 2013 strategy failure became undeniable , company execs explained it as a mistake in mid-range product planning.
“One flagship itself is doing fine”, they said. “It’s our mid-range product portfolio that is underperforming.” And moved fast to change the strategy with new mid-tier smartphones.
HTC Desire 700, 501 and dual-SIM 601 are the first fruits of this strategy change. But unless they get some serious support from Chinese carriers, the new phones will again disappoint everyone around. Their price to specs ratio is way too high compared to what’s available around the world, and especially in China.
Nevertheless, all three models are very interesting in what they tell us about HTC’s new strategy and changes in its supply chain.
According to Focus Taiwan, none of the new Desires come with a Qualcomm CPU inside. HTC Desire 700 has Spreadtrum Shark 1.2GHz quad-core chip running it, HTC Desire 501 got ST-Ericsson’s U8520 1.15 GHz dual-core processor. What’s even more interesting, dual-SIM Desire 601 now runs on a quad-core Broadcom Java 1.2 GHz CPU, even if its single SIM sibling had Qualcomm 400.
Expanding its CPU supplier base is part of HTC’s strategy to lower device costs, while preserving at least some of the margins. Another part of this strategy is the outsourcing of the production of low-end models to smartphone ODMs. cnYES reports, that HTC has recently completed negotiations with Warburg, Arima for a small scale production in the first half of 2014, with the goal to identify which models to ODM next.
The new approach doesn’t seem to work for HTC just yet. But these are the early days and only the first products. Hopefully HTC will learn and figure the things out real fast.
Broadcom's integrated smartphone platform allows K-Touch to provide customers with smartphones that can operate on China Unicom's HSPA+ network.
Multi-constellation GNSS Location Chip
Multi-constellation capability collects data from four satellite constellations
Faster signal searches and more accurate real-time navigation
Availability K-Touch W98 and W96 smartphones are now available.
"Bringing affordable smartphones to market that provide fast wireless access and feature a range of value-added multimedia, productivity and entertainment-based applications is our key goal," said Rong Xiuli, K-Touch Chief Executive Officer. "Broadcom innovation helps us achieve this goal by enabling content streaming over WiFi, simultaneous sharing and projecting of content on a larger display, and easier multitasking; giving our users both high-end connectivity and functionality at an accessible price point."
"Our complete, integrated turnkey smartphone platform provides today's device manufacturers with the functionality they need to deliver affordable smartphones with premium features like HSPA+ and a high-end multimedia and entertainment experience," said Michael Civiello, Broadcom Senior Director, Mobile Platform Solutions. "As more users make the leap to feature-rich smartphones, this turnkey platform will play a critical role in accelerating time-to-market for K-Touch and other OEMs to deliver low-cost, feature-loaded devices."
HSPA+ 1.2-GHz quad-core processor
Provides superior computing power at an affordable price point
VideoCore® multimedia support for an immersive multimedia experience
Low power Dual SIM / Dual Standby to enable simultaneous monitoring of 2 separate networks
Highly integrated RF cellular transceiver for multi-mode (EDGE/GPRS/GSM® and WCDMA/HSDPA/HSUPA) and multi-band (850/900/1800/1900/2100 MHz) applications
Power Management IC
Two fully integrated, programmable, step-down switching regulators with overcurrent and overvoltage protection
Six high-performance programmable Low Dropout (LDO) regulators with overcurrent protection
Connectivity Combo Chip
Dual-band 2.4 GHz and 5 GHz IEEE 802.11 a/b/g/n Wi-Fi connectivity
Single-stream IEEE 802.11n support for 20 MHz and 40 MHz channels provides PHY layer rates up to 150 Mbps for typical upper-layer throughput in excess of 90 Mbps
K-Touch Chooses Broadcom Quad-Core Turnkey Platform to Enable New W98 and W96 Android Smartphones
Delivers Advanced Wireless Connectivity and Multimedia Processing Power to Affordable, Feature-Loaded Mobile Devices
By Broadcom Corporation; BRCM Mobile & Wireless
Published: Wednesday, Nov. 27, 2013 - 5:07 am
IRVINE, Calif., Nov. 27, 2013 -- /PRNewswire/ -- Broadcom Corporation (NASDAQ: BRCM), a global innovation leader in semiconductor solutions for wired and wireless communications, today announced that the Chinese cellphone manufacturer K-Touch has chosen its quad-core turnkey platform for its new W98 and W96 Android-based smartphones. Powered by an HSPA+ 1.2-GHz quad-core processor, RF Transceiver, power management IC, connectivity combo chip and multi-constellation GNSS location chip, Broadcom's integrated smartphone platform allows K-Touch to provide customers with affordable, feature-loaded smartphones that can operate on China Unicom's growing HSPA+ network. For more news, visit Broadcom's Newsroom.
According to a recent survey from Counterpoint Technology Market Research, 30 million smartphones were sold in China during August, 96 percent of which were Android-based1. A primary driver for this growth is the availability of affordable smartphones and the shift by operators to low and mid-priced handsets. Despite the drive toward lower-cost devices, user demand for enhanced functionality is on the rise. Thanks to Broadcom innovation, the new W98 and W96 Android phones from K-Touch can now deliver the functionality consumers demand at a price they can afford.
"Bringing affordable smartphones to market that provide fast wireless access and feature a range of value-added multimedia, productivity and entertainment-based applications is our key goal," said Rong Xiuli, K-Touch Chief Executive Officer. "Broadcom innovation helps us achieve this goal by enabling content streaming over WiFi, simultaneous sharing and projecting of content on a larger display, and easi
China's state media cites December 18 launch for iPhone 5s, 5c
By Daniel Eran Dilger
Tuesday, November 26, 2013 @ 10:29 PM
The official state media of People's Republic of China, Xinhua News Agency, has reiterated expectations targeting December 18 as the launch date for Apple's 4G TD-LTE capable iPhone 5s and 5c on China Mobile.
Last week, reports focused on the scheduling of China Mobile's 4G Global Partners Conference, highlighting expectations that Apple's iPhone launch on the world's largest carrier would also begin on that date.
A new report by Xinhua, tipped by reader Jim Neal, describes China Mobile as starting its home-grown version of 4G LTE data service on the 18th under the new brand He, "meaning harmonious in the Chinese language."
The report cited China Mobile president Li Yue as "expecting" some 4G phones priced as low as US $162 "to appear in the second half of next year."
It also added, "Apple, Inc is also set to introduce iPhones supporting the 4G network in China, industry insiders said. The US giant and China Mobile are in negotiations over the 4G iPhone and they will launch it officially on December 18."
Last week, the Wall Street Journal cited Mizuho Securities analyst Marvin Lo in Hong Kong as stating that "a deal with China Mobile would give Apple a big boost in the China market as the largest local carrier has the most wealthy subscriber base.
"I estimate that among China Mobile's more than 700 million mobile subscribers, at least 10% or 70 million wealthier ones would be potential customers for iPhones," he added.
IHS estimates Xbox One costs $471 to make, AMD gets $110 per unit
9 HOURS AGOMSFT, AMD
After tearing down the device, IHS estimates the Xbox One (MSFT -0.1%) and its bundled Kinect sensor cost $471 to produce. The Kinect accounts for $75 of that total.
With the console sporting a retail price of $499, that suggests Microsoft could be selling the One for a loss after accounting for expenses such as such as fulfillment costs and retailer cuts. As with past consoles, manufacturing costs are bound to decline over time, as component prices come down.
Interestingly, IHS thinks CPU/GPU supplier AMD (AMD +2.2%) receives $110 per One unit. That's $10 more than the firm thinks AMD gets for each shipment of a very similar processor going into the PlayStation 4 (total estimated manufacturing cost of $381).
The report comes a few days after Microsoft announced it sold 1M One units in the console's first 24 hours of availability, and a day after Nomura predicted the Xbox division will likely lose over $1B in 2013, after factoring expenses such as marketing and R&D. Today, Janney estimates One shipments could hit 6M by March 31.
By Supantha Mukherjee and Neha Alawadhi
(Reuters) - Qualcomm Inc said on Monday it faces an antitrust probe in China, sending its shares lower as investors worried the investigation could hurt the chipmaker's business in the fast-growing smartphone market.
The company said it was not aware of any antitrust violations but would cooperate with the probe by China's National Development and Reform Commission (NDRC).
The NDRC did not say why the company was being investigated, according to Qualcomm.
China's state media on Sunday quoted an NDRC official saying the country would focus antitrust investigations on six industries, ranging from technology to medicine.
Qualcomm, the world's biggest maker of cellphone chips, sees China as a key market as growth in smartphones shifts away from the United States to developing countries and as China Mobile prepares to upgrade to high-speed networks using technology developed by Qualcomm.
The U.S. company reported $12.3 billion in revenue from China in the 12 months through September, equal to 49 percent of its total revenue.
But many of the smartphones made in China are exported, so the Chinese market actually accounts for about a fifth of Qualcomm's chip shipments and licensing revenue, according to Raymond James analyst Tavis McCourt.
Some analysts speculate the government may be seeking leverage in royalty negotiations with Qualcomm ahead of the expected rollout of new 4G wireless infrastructure in 2014. Others theorize that Beijing may be moving to support local suppliers trying to compete with Qualcomm, the global leader in 4G technology, also known as Long-Term Evolution (LTE).
In February, the NDRC attracted attention when it fined six Korean and Taiwanese makers of liquid crystal displays about $57 million for price fixing.
With Broadcom Corp, Intel Corp and other chipmakers missing targets for their own LTE components, Qualcomm is the main player in LTE, which China Mobile plans to roll out next year to allow for faster data transfer rates over cellphones.
"We suspect this investigation is related to the forthcoming launch of TD-LTE by China Mobile in early 2014 and the negotiations on chip pricing and license pricing between Qualcomm and Chinese-based handset (manufacturers) that are likely occurring right now," McCourt wrote in an note to clients.
A Qualcomm spokesman declined to comment.
With growth in the smartphone industry shifting away from wealthy markets toward China, Qualcomm and other U.S. chipmakers have increased their focus on supplying components for low-cost phones. And they are competing more with local chipmakers.
A new wave of Asian smartphone makers has also emerged to help meet demand for low-end handsets: companies such as Lenovo Group Ltd, ZTE Corp and Xiaomi Tech, the rising star of cheap, made-in-China smartphones.
The Chinese government appears to be pushing for local technology suppliers, said Evercore Partners analyst Mark McKechnie.
In the last few months, organizations affiliated with the Chinese government spent nearly $3 billion to buy Chinese mobile chipmakers Spreadtrum Communications Inc and RDA Microelectronics Inc. Both companies have technology that competes with Qualcomm's.
China Mobile, the world's biggest mobile carrier with 800 million subscribers, is investing billions of dollars to upgrade its infrastructure to LTE so clients can enjoy speedier Internet and data access.
"You're getting ready to have this battle over 4G royalties and now you have this antitrust investigation," said Williams Financial analyst Cody Acree. "It may well be that this reform commission is beginning to throw up reasons and excuses for why China doesn't pay royalties on 4G."
The NDRC is China's top economic planning body and regulates prices. It has launched nearly 20 pricing-related probes of domestic and foreign firms in the last three years, according to official media reports and research published by law firms.
The NDRC fined six companies, including Mead Johnson Nutrition Co, Danone SA and New Zealand dairy giant Fonterra, a total of $110 million in August following a four-month investigation into price fixing and anti-competitive practices by foreign makers of baby formula.
In August, sources told Reuters that a senior Chinese official had put pressure on about 30 foreign firms, including General Electric Co and Siemens, to admit to antitrust violations and warned them against using external lawyers to fight accusations from regulators.
Shares of San Diego-based Qualcomm were down 1 percent at $72.23 in afternoon trading on the Nasdaq.
Infrastructure spending on 4G will nearly triple to $24.3 billion in 2013 from $8.7 billion in 2012, according to research firm IHS iSuppli, fueled by network expansions in major markets such as China, Japan and Germany.
(Additional reporting by Noel Randewich, Sinead Carew and Soham Chatterjee; Editing by Joyjeet Das, Rodney Joyce and John Wallace)
Mobile phones based on the latest 4G technology may be available at a price of as low as $100 (around Rs 6,200) in next 18 months, says mobile chipset maker Broadcom.
"Operators in the US are looking to buy 4G mobile phones for $100. They are not there yet but they are heading in that direction ... 18 months time should be reasonable to achieve it," Broadcom Mobile Senior Director (Mobile Platform Solutions) Michael Civiello told PTI.
The 4G technology is nearly five-times faster than its predecessor 3G but handsets that work on this ultra fast service are costly.
The lowest priced 4G phone is available at around Rs 18,000 in India. However, most of such handsets cost above Rs 40,000. On the other hand, 3G phones have seen major price drop to as low as Rs 4,000 in the market.
Civiello said that the $100 4G devices will not come from big Tier I global brands. "It will come from some local brand or no brand company who is not putting any marketing dollar in phone,not putting any promotional campaign etc."
Talking about India, he said the price will depend on volumes and Reliance Jio Infocomm, which is the only company that has 4G spectrum in all telecom circles in the country, can play a key role in driving down the price of devices.
On rationale behind major drop in the price of 4G phones, he said that the initial cost of 4G technology component is high, but after development volumes drive down the cost of these components.
"The volumes are getting to a point where all components manufacturer whether display, battery, radio frequency module are reaching to a volume...If those volumes become better the price will come down," he said.
The Broadcom director feels that there may be a difference of $10 in price in India as 4G spectrum allocated to operators here is different from that in the US.
Broadcom currently has three main baseband chips that we’ll be seeing in smartphones; BCM 21663 and BCM 28145 are dual-core baseband chips and the BCM 23550 is their current flagship quad-core SoC. The latter will also debut in XOLO’s upcoming Q1000 Opus smartphone.
The company will also be playing a key role in the some of the upcoming LTE phones from Micromax, etc which are due for an announcement towards the end of the year. “Our recent acquisition of Renesas Mobile Corporation, the ex-Nokia chip company, gives us an advanced position in LTE”, said Mr. Rajiv Kapur, MD Broadcom India.
Broadcom has also tied up with key smartphone players like XOLO, Panasonic, Karbonn, Idea and Micromax to deliver either complete platform solutions (baseband, connectivity suite and navigation) or simply individual modules. This allows more flexibility as OEM’s can select a MediaTek or a Qualcomm chipset and pair it with Broadcom’s BCM4752 multi-constellation GNSS chip to deliver a better package.
Our interaction with them was centred on bringing advanced wireless and navigation features to budget phones. Things like dual-band Wi-Fi, 5G Wi-FI, NFC, Miracast, GLONASS, Bluetooth low energy (BLE) for wearable computing and their proprietary Smart On function which enables dual standby SIM cards to behave as dual active could soon be new features in the next wave of Chinese droids.
At the end of our interaction, the message was pretty clear – Broadcom is more than happy playing the unsung heroes as they don’t plan on going crazy with marketing their new chipsets the way Qualcomm does. They don’t care about bringing in octa-core SoCs anytime soon either. Providing better wireless solutions in the budget segment is their primary goal and we feel they have a huge advantage here considering that’s their pedigree. The next bunch of smartphones from players like Karbonn, XOLO and Micromax are going be more about better wireless connectivity and improved location services and honestly, it’s about time too.
Broadcom could disrupt MediaTek’s monopoly in budget smartphones
The sub-Rs 20,000 price segment is currently a hot-bed for Chinese smartphone vendors offering everything from Full HD displays, quad-core CPUs, 13MP camera modules to giant screen sizes – all this at a very affordable price. MediaTek has been a key player in powering all these features right from the get go and now, it’s tough to find an Android phone under Rs 20,000 that isn’t powered by a MediaTek chipset.
One thing that has been lacking however is better wireless connectivity. We’ve gotten used to not having NFC, GLONASS, dual-band Wi-Fi, etc simply because MediaTek’s chipsets don’t have these features currently. Broadcom’s renewed focus on the budget segment could potentially change what customers typically expect from smartphones. We had a chance to sit down with some of the key folks over at Broadcom, to understand their game plan on changing the perception of budget smartphones.
For those who aren’t aware, Broadcom is primarily a wireless and broadband communications company whose bread and butter is providing solutions for everything from enterprise servers, cable modems, home networking to even mobile phones. In fact, some of the most popular consumer electronic devices like the iPod, Samsung Galaxy S4, Galaxy Note 3 and others use Broadcom’s technology for NFC, Wi-Fi, Bluetooth, etc. The American company is now shifting its focus on baseband chips and better wireless connectivity for affordable smartphones given the boom in emerging markets like ours.
His chutzpah, bravado, and accomplishment resembles a young Steve Jobs. Being sent to present at many recent Confabs indicates he is anointed to be the next CEO just in time to announce LTE design win in 1Q14.
Stock should appreciate materially then. Ho ho Bob, Scott have to go!
Yeah. I know, I think that as we’ve dug into it, the -- we found that modem itself is very, very cost competitive. We think its really does sit well in this low-end segment and it's a product that frankly gives us some optimism that we’re going to able to compete effectively not only now but forward looking.
Now it’s a very interesting architecture and one that lend itself to a smaller die size and one that we think is going to scale across multiple platforms from high to low. So it's been a positive surprise in that regard.
And then in terms of the actual integration, obviously, there's a lot of complexity when you bring two teams together. Again, I think no real surprises in that regard. It’s a challenge. I think, we’ve been consistent in talking to that, but it's not been the surprise.
And the good news is the execution path of both teams, both the Broadcom internal team and the Renesas team has continued on our predictable vectors and the vectors that we’ve thought that we’re going to hit on production milestones, things like that.
Yeah. I mean, I think, in general, the topline customers have been very excited. There is certainly a desire to, number one, drive the cost point of LTE down and I think that, we can be very aggressive in terms of establishing of good low-end solid foundation, the low-end.
But more importantly, having choice alternatives to the current supplier and I think that the customer base has been very, very excited, we have a historic customer base and we been able to sort of expand beyond that in terms of our customer conversation because people will come to us and really driven inquiries around being able to work with us on LTE.
So I think it’s too early to call design wins and things like that. But certainly from our perspective, we have line of site now to be able to call revenue in Q1. I think that there is obviously very serious engagements that are on slides and engagements that we think we’re going to ultimately result in material revenue in first quarter.