A 'Marvell'ous Future in Netbooks

Key quotes from Marvell Technology Group Ltd.’s FQ309 conference call:

On ‘mobile convergence market’ products such as notebook PCs and smart phones:

Over the last year or so, we have witnessed the emergence of the net book market place. We see these devices as early examples of a larger trend, which offers Marvell a high-volume market opportunity.

Users are not looking to run complex business applications on these new devices, but rather, they want a device to provide access to reach online content… e-mail, and… they want an entertainment device to watch videos, in fact maybe even HD videos, or play games while on the go. Equally important to users is a device which has the power consumption and the instant-on capability of a smart phone, coupled with the computing performance and storage density of a notebook PC.

In our view, the potential to develop a converged mobile product, which would sell between US$100.00 to US$200.00 is only less than 12 months away.

At this price point, we believe consumers within emerging markets will drive significant volumes far in excess of the current notebook PC market and likely equal a greater volume than smart phone markets. The one area which may still prevent a slight challenge is the storage sub-system of these devices.

I believe this is one of the biggest market opportunities of the semiconductor market, to address the next 1.0 billion to 2.0 billion customers. These are the customers that can only afford to pay around $100. I say $100 to $200.

More on 3G, wireless:

There are not too many players providing 3G solutions in the open market so obviously our biggest competitors are Qualcomm (QCOM) in the 3G space.

We have new engagements on the newer technology for the more advanced 3G technology with our customers.

Sales of our embedded wireless products were down sequentially but grew on a year-over-year basis by approximately 17%, reflecting the increased usage of wireless connectivity.

We are leveraging the software infrastructure of the XScale so all the software on wireless MMX2, this is all the things that normally you need to run flash, like Adobe Flash, to run transparently into the platform.

We are already shipping or about to ship some very high volume products to some new platforms that integrate Bluetooth with WiFi capability.

One of the main problems in the semi-conductor industry has been oversupply:

We are observing is an increased level of hesitation by our customers to make any long-term order commitments.

While a portion of the turmoil seen in the semi-conductor supply chain is re-opening and in motion, we also believe a certain amount could be due to overreaction.

We do see inventories relatively lean on a historic basis.