Splitting High-End Cell Business With Broadcom Could Hurt Texas Instruments - Barron's

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 |  Includes: AVGO, NOK, TXN
by: SA Eli Hoffmann

Annotated article summary from this weekend's Barron's. Receive all our Barron's summaries by signing up here:

Will Nokia Break TI's Heart? by Mark Veverka

Summary: In February, Nokia (NYSE:NOK) announced it would be buying chips for its entry-level cellphones from Infineon Technologies AG (IFX), a blow to Texas Instruments Inc. (NASDAQ:TXN), who had until then been the near-exclusive supplier of chips for Nokia handsets. Now, Plugged In editor Mark Veverka says, there's speculation Nokia will partially abandon TI on its high-end handsets too, opting for chipsets from Freescale Semiconductor and Broadcom Corp. (BRCM) alongside those of Texas Instruments. No executives from any of the companies would comment, but Broadcom CEO Scott McGregor has hinted his company would be moving from its established cable-TV business into the wireless sector: "We won't be able to announce those design wins as they happen, which is, I assure you, as frustrating for you as it is for us -- but that's the nature of that business," he said in a recent conference call. TI's David Pahl says the company knows handset makers are looking at using multiple suppliers, but says the trend could prove advantageous for TI, who recently won new business from Motorola Inc. (MOT). TI shares are up 35% since July on forecasts of profit margin increases. If its high-end business starts to wane, it may have a hard time reaching its goals.

Related Links: Nokia Moving Away From Texas Instruments, Closer To Infineon and Qualcomm?Texas Instruments: Stock Up on Deal with MotorolaApple's iPhone and the Future of BroadcomGet Ready For An Ugly Quarter For Mobile Phones

Conference call transcripts: Texas Instruments Q1 2007, Broadcom Q1 2007, Nokia Q1 2007

Broadcom 21 05 2007 Chart Texas Instruments 21 05 2007 Chart