Broadcom pushes mobile video, bright outlook
Broadcom on Tuesday highlighted mobile video and home networking in product announcements and a rosy business forecast while the company received good news about two former executives.
The communications silicon company has been hurt less than the overall industry by the recession and sees the downturn as a good time to make additional acquisitions, President and CEO Scott McGregor said in his opening remarks at Broadcom's annual financial analyst day. Citing figures from analysts, McGregor said Broadcom's revenue has been forecast to dip by about 5 percent in 2009 while the overall semiconductor industry declines by 11 percent. Meanwhile, he said Broadcom would update its financial forecast later in the day.
The event broke out in applause in midmorning when Peter Andrew, vice president of corporate communications, passed on the news that a judge had dismissed a criminal case against Broadcom co-founder Henry T. Nicholas III and former Chief Financial Officer William Ruehle. They had been accused of conspiring to inflate Broadcom's earnings by fraudulently backdating employee stock-option grants between 1998 and 2003. Judge Cormac Carney of the U.S. District Court for the Central District of California, in Santa Ana, dismissed the case because prosecutors improperly intimidated witnesses, according to news reports.
Also on Tuesday, Broadcom announced a range of products including a high-definition multimedia chip for mobile devices, a chipset for "multimedia connected consumer devices" such as tablets, and chips for more power-efficient Ethernet equipment in enterprises.
Broadcom supplies components for wired and wireless products in the enterprise, home and mobile markets. It has an advantage over rivals because it can leverage the hardware and software it develops across many types of products, McGregor said.
"None of our competitors have the breadth we do," McGregor said.
The company is focusing on high-quality multimedia capabilities in both home electronics and mobile phones, with the DLNA (Digital Living Network Alliance) standard as the common thread to allow transfers of content among them.
On Tuesday, it announced a cellular multimedia chip that can power 1080p high-definition video recording, 20-megapixel still photography and the ability to display 1-gigapixel 2-D and 3-D graphics for gaming. The BCM2763 VideoCore IV will be manufactured using a 40-nanometer technology to result in a chip with low power consumption, Broadcom said. It is shipping to phone makers in sample quantities, and devices with the chip should go on sale in 2011, the company said.
Broadcom also announced the Persona platform, an IP (Internet Protocol) communications chipset that will support 3-D graphics and high-quality audio. The Persona is designed to power devices that give consumers access to digital video recorder, set-top box and home automation capabilities as well as high-resolution videoconferencing. They could take the form of tablet computers, company executives said.
"Living rooms are not boring anymore. Living rooms are getting connected," McGregor said.
Ongoing consolidation in the chip industry gives Broadcom a chance to make more acquisitions to further expand its capabilities, McGregor said. Sticking with its longtime acquisition strategy, most of those deals will involve small companies that aren't yet selling products or are just beginning to, rather than larger public companies, he said. Earlier this year, Broadcom failed with a $925 million offer to buy network components maker Emulex.
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