Apple's iPhone and the Future of Marvell

“Apple (AAPL) plans to sell its iPhone through an exclusive marketing agreement with AT&T’s (T) Cingular Wireless unit. While Cingular’s data network is woefully slow, the Wi-Fi feature will give the mobile phone high speed data capability when users can find Wi-Fi hotspots. To date, cell phone service providers have been reluctant to introduce mobile phones with Wi-Fi capability, fearing the wireless technology — which is often free — could cannibalize their existing data network service offerings.” (EE Times)

Marvell (MRVL) scored the design win to provide the Wi-Fi chip for the iPhone, and if the product and the functionality takes off, it could have a nice upswing.

Last year, Marvell bought Intel’s (INTC) Communication chip business for $600 Million. It was a risky move, since the division has consistently struggled to take off within Intel. Will the iPhone win allow the company to recover its investment?

MRVL 1-yr chart