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Broadcom Corporation (BRCM)

Q4 2005 Earnings Conference Call

January 25th 2006, 4:45 PM.

Executives:

Peter Andrew, Vice President of Investor Relations

Scott McGregor, President and Chief Executive Officer

Bill Ruehle, Chief Financial Officer

Henry Samueli, Chief Technical Officer

Analysts:

Michael Masdea, Credit Suisse

Raul Seymour, Deutsche Bank

Arnold Shamroth

Cody Acree, Stifel Nicolaus

Alex Gauna, UBS

Seogju Lee, Goldman Sachs

Ambrish Srivastava, Harris Nesbitt

Jeremy Bunting, Thomas Weisel

Charlie Glavin, Needham & Company

Brian Alger, Pacific Growth Equities

Bill Lewis, JP Morgan

Hung Lee, Global Crown Capital

Jeff Palmer, Freidman Billing Ramsey

Ruben Roy

Adam Benjamin, Jefferies

Operator

Welcome to the Broadcom’s Fourth Quarter Fiscal Year 2005 Earnings Conference Call. During the presentation, all participants will be in a listen-only mode. Afterwards we will conduct a question and answer session. At that time, if you have a question please press “*” followed by the “1” on your telephone. As a remainder, this conference is being recorded on Thursday January 25th 2006. Your speakers today are Scott McGregor, Broadcom’s President and Chief Executive Officer, Henry Samueli, Broadcom’s Chief Technical Officer and Co-Founder, Bill Ruehle, Broadcom’s Chief Financial Officer and Peter Andrew, Vice President, Investor Relations. I’d now like to turn the conference over to Mr. Andrew, please go ahead sir.

Peter Andrew, Vice President of Investor Relations

Thank you very much Adam, good morning and welcome everyone to Broadcom’s Q4 earnings conference call. I want to remind everyone that during this call we will discuss some factors that are likely to influence our business going forward. These forward-looking statements include guidance we will provide on future revenue, gross margin and operating expense targets for the first quarter of 2006 or any other future periods and statements about prospects for our various businesses and the development status, and planned availability of new products. This will be clearly understood that our actual results may differ substantially from the forward-looking statements we make today. Specific factors that may affect our business and future results are discussed in the risk factor section of our 2004, 10-K and subsequent 10-Q and in our other SEC filings. A partial list of the important risk factors is set forth at the end of today’s earnings press release. As always, we undertake no obligation to revise or update publicly any forward-looking statements for any reasons.

Throughout this call, whenever we refer to pro forma financial results, we mean non-GAAP pro forma. The earnings release published today describes the differences between our non-GAAP pro forma and GAAP reporting and presents a reconsolidation between the 2 for the periods reported in the release. Please see the investor’s section of our website for reconciliations going back to the beginning of 2004, as well as for additional financial and statistical information including the information disclosed in accordance with SEC Regulation G. With I would now like to turn the call over to Scott.

Scott McGregor, President and Chief Executive Officer

Good afternoon and thanks for joining us. The fourth quarter was a very strong quarter for Broadcom on many fronts. We grew revenue 18% sequentially to $821 million another record level for Broadcom. We experienced revenue growth in each of our target end-markets. We had record net income on both the GAAP and non-GAAP pro forma basis, and we grew cash in marketable securities by a $170 million to $1.88 billion. The drivers of this growth were simple, communications and convergence. Broadcom is benefited from a number of product cycles occurring within the communication, and perverts product end-markets. At home, work or mobile users one of the connected whether over a wired connection, via Ethernet, network or broadband modem or wireless, be wireless Lan, Bluetooth and Cellular. Cable, telephone, cellular and satellite operators are upgrading their networks to offer triple play services that include, high definition video, audio, voice and data services. These network upgrades are not only driving an upgrade of the end equipment to receive these signals, but also enabling the creation of new devices such as portable media players. Many of these product cycles are early in their evolution and Broadcom is investing aggressively to take advantage of these opportunities. Our broad product line, intellectual property portfolio and track record of superior execution are key competitive differentiators in this new connected and converge world. Broadcom’s strong performance is the driver behind 2 other announcements we made today, the first being the 3/2 stocks split and the second being the substantial increase in our share buyback program. We believe both of these actions will help create value for our investors. I’ll go into more detail in how Broadcom’s benefiting from these trends in a few minutes, but first Bill will give you an overview of our Q4 and full year performance, the stock split and the new buyback program and our guidance for Q1.

Bill Ruehle, Chief Financial Officer

Thank you, Scott. The financial overview in Q4’05 our growth once again exceeded our expectations. Our record quarterly revenue of 820.6 million was up more than 125 million or approximately 18% from Q3. This was the highest absolute dollars sequential revenue increase in our history. Compared with the year earlier revenue was up more than 281 million or 52% from Q4 of ’04. Our pro forma gross margin of 53.1% was down 30 basis points from last quarter, inline with our guidance. Total pro forma operating expense was up 12.8 million or 5.8% from Q3, this was less than 1/3 the rate of our revenue increase. Pro forma operating margin climbed to 24.4% up from 21.5% of revenue in Q3 as we were able to realize significant leverage on our large top line increase. Pro forma diluted earnings per share of $0.50 were up at $0.11 from last quarter. On a GAAP reporting basis, our EPS equaled our pro forma earnings at $0.50 per share. Our full year 2005 results were also at record levels; revenue of 2.670 billion was up 270 million or 11.3% from 2004. Pro forma gross margin for the full year of 53.1% was up 2.2 percentage points from the 50.9% reported in ’04. Pro forma EPS of a $1.47 were up $0.25 or just over 20% from the $22 reported for the full year of ’04. On a GAAP reporting basis earnings per share for 2005 was $1.10 this was up $0.47 or 75% over the $0.63 reported in 2004. Our cash and marketable securities on hand increased by 170 million for the quarter, leaving us with a balance of 1.875 billion and for the full year cash and marketable securities increased by 600 million.

Let’s take a look at the revenue and gross margin. In our October call, we said we expected Q4 revenue to be in the range of 765 million to 775 million, which would have been an increase of 10% to 12% over Q3. In the course of our November 9th analyst day presentation, we updated that guidance to say we expected revenue to be at or above a high-end of that range. In fact our bookings and shipments continue to be stronger than expected through out the quarter and we were able to see revenue just over 820 million, an increase of 18%.

In the quarter, we experienced particularly strong sequential growth in Mobile Multimedia, and direct broadcast satellite and Bluetooth and Gigabit Switching and in DSL. For the full year, our biggest growth drivers as measured by absolute dollar revenue increase and an order of significance were Bluetooth, Mobile Multimedia, DSL, Gigabit controller, cable modem and Gigabit 5 and switching. Once again demonstrating the importance of the breadth of our product line. Our most significant decline was seen in our server chipset business, which declined over 200 million from year-to-year and that decline is now all behind us. And looking at our change in revenues from Q3 to Q4 our broadband communication sector increased by above 5%. Mobile and wireless increased by about 44% and enterprise networking increased by about 12%. In terms of revenue distribution for Q4, broadband communications accounted for approximately 30% total revenue, mobile and wireless were 33% and enterprise networking for 37%. And in Q4, Motorola was once again a 10% plus customer.

Our Q4 pro forma gross margin at 53.1% was down slightly from the 53.4% reported last quarter. In our original guidance for the quarter, back in October we had anticipated a decrease of 50 to 100 basis points. In our November 9th analyst day, we updated that guidance to an expectation of a decrease of 50 basis points or less, or less. Our actual decline was 30 basis points; we experienced some change in product mix towards lower margin product and are continuing to see less pricing flexibility at the foundry level.

Turning to operating expenses, total pro forma operating expenses of 235 million in Q4 were up 12.8 million or 5.8% with the last quarter, this included an increase of 9.7 million or 6.1% in R&D and an increase of 3.2 million or 5% in SG&A. The R&D increase was primarily from addition to 240 headcount, including 56 from our Athena acquisitions that we completed in October. Once again our revenue growth allowed us to be very aggressive in adding to our R&D capabilities. SG&A increase was primarily driven by higher legal cost and additional headcount. We increased our total worldwide company headcount by 285 to a total of 4287, this includes over 3,000 people in engineering, which puts our engineering total at just over 70% of our total headcount. As of year-end just over 25% of our employees were located outside the US, with by for the largest offshore concentration being in Asia. Our annualized revenue per employee was 766,000 up from $695,000 the previous quarter and up sequentially from the 640,000 reported in Q4 ’04.

Turning to profitability in Q4, on pro forma non-GAAP basis we generated operating profit of $200.6 million at 24.4% of revenue just reflected our ability to generate substantial leverage on our large revenue increase. Our revenue was up 18% sequentially, OpEx was up less than 6% and operating profit was up more than 34%. Our share count increased by less than 2% allowing us to also show good leverage of the EPS line.

Our pro forma diluted EPS were $0.50 up 28% or 11% from last quarter. On a GAAP basis we’ve recorded an operating profit of $175 million. Our GAAP diluted EPS were positive to $0.50, GAAP earnings in the quarter, included the tax benefit primarily related to Q4, reductions in certain foreign tax reserves.

Looking now at the balance sheet, we continued our ability to generate substantial positive cash-flow increasing total cash and marketable securities by 170 million to an all time high of 1.875 billion. Our cash-flow from operations for the quarter was 134 million, our free cash-flow and increasingly our investors are telling us, this is the measure, its particularly important to them. Our free cash flow which is defined as cash flow from operation minus capital purchases was 117 million. During the quarter, we dispersed $33 million in cash per acquisition cost and $58 million in persuade of our stock buyback program. On the cash positive side, we collected 122 million from employee stock option exercises. Our inventory balances increased the same height as our revenue in response to our continued strong demand. Our days of inventory on hand remain constant, at 46. This is equivalent to our churns rate of 7.9, which is in line with our long term model.

Our days sales outstanding decreased from 36 days to 34, the shipments for the quarter, were more front-end loaded, to accommodate our customer’s needs per shipment to support their holiday sales. There were couple of capitalization actions that we took in the quarter, as Scott refer to, given the strength of our balance sheet and our continuing desire to minimize share dilution. We have today announced that our Board of Directors has approved an increasing in our share buyback program. If you recall in April 2005, we implemented a program targeted repurchasing up to 250 million worth of our shares, over a 12 months period. To December 31st, of ’05 we have repurchased 154 million of shares, on this program. As of today that authorization has been amended to allow the repurchases of up to and additional 500 million worth of shares over the next 12 months. We expect to begin those purchases at the end of this open. This will give us a capability to retire approximately 2% of our outstanding shares over the next 12 months.

We’ve also announced today, a 3 per 2 stock split for shareholders a record at close of business on February, 6th. The distribution is expected to be effective on/or around February 21st. This is intended to be another shareholders friendly motive particularly with regard to enabling us to expand our shareholder base in the retail market for absolute price is an important criterion. At our current share price we’ve ranked within the top 2.5% of all NASDAQ stocks in absolute price, and within the top 20% with the NASDAQ 100 stocks.

Turning now to our guidance. When we gave guidance for Q4, we commented that we believe that some of strength we are experiencing was coming from purchases by our consumer oriented customers in preparation to the holiday selling season. Further more we said we thought possible revenue to decline in Q1 because of the increased buying of consumer related business as we are doing. As those of you who have been following Broadcom for sometime now we’ve always been driven more by product cycles then by seasonality. We are pleased to be able to report that even with our increased consumer related business and some seasonality that we are experiencing in some product line our capable position several dynamic product cycles continues to prevail over seasonal factors. Therefore we now expect Q1 revenue to be up in the mid single digit on a percentage basis from Q4, to a range of $865 million to $875 million. We expected this growth to be broad based with the strongest growth expected to come from our broadband communication sector. We believe that gross margin for Q1 on a pro forma basis will be flat to slightly down, versus Q4. We expect the pro forma operating expenses will increase at a rate that is approximately equal to or slightly lower than our rate of related revenue increase. This rate of increase is driven partially by the new expenses anticipated as a result of the Sunwest acquisition, as well as increased headcount to support R&D and other programs. We expect the cash-flow generation to once again be quite strong in Q1. Now I’d like to turn the call back over to Scott to provide some more perspective on the business.

Scott McGregor, President and CEO

Thanks Bill, as I mentioned previously trends in communication and convergence have been key driver behind Broadcom’s recent success. Our ability to offer a complete solution to our customers would become a significant competitive differentiator. With the wired to wireless profits in voice, video or data, Broadcam has the products intellectual property and secure your execution track record to capitalize on these opportunities. I’ll now let you market highlights before opening the call to Q&A.

We saw the greatest growth in our mobile and wireless products again this quarter, as revenue was up over 40% versus Q3, and up nearly 40% for the year. On the first of this month, Broadcom split the mobile and wireless business group into two parts to give additional management focus to each business. The first as what we called mobile platforms, focused on driving the adoption of our cellular base band and mobile multimedia processors into portable devices. This business group is led by Yossi Cohen a long time Broadcom executive who is most recently responsible for leading our very successful Bluetooth efforts.

The second is wireless connectivity which Bob Rango is running. This group is responsible for our leadership Wireless LAN, Bluetooth, and Voice-over-IP lines business. These are ingredient technologies or functions that we look to populate throughout our other products. We expect to expand the breadth of our offerings in this group. For financial reporting purposes these 2 groups will continue to hold up in the revenue for the both will be consolidated and reported as our mobile and wireless target market, which we have in the past and will continue to disclose on a quarterly basis. Highlighting just how diverse our growth was in the fourth quarter, the key revenue growth drivers in mobile and wireless were Mobile Multimedia, cellular baseband Bluetooth and Wireless LAN. The conversions of audio, video and data into portable devices continues to drive demand for our mobile multimedia products. In the fourth quarter we shipped our new video card 2 architectural base products to multiple customers. Our success has been due to high quality audio and video at incredibly low power. These features have been highly sold after the cell phones and portable media devices audio, video and gaming functionality. In cellular baseband we experienced a strong Q4, driven by our 2G and 2.5G product refresh our biggest customer in the space. With respective to 3G, our progress remains on track. We have multiple design wins and continued to expect to 3G revenue contribution primarily in the second half of 2006.

Demand for Broadcom’s Bluetooth solutions remains very strong. We believe we gained additional market share in the quarter driven by our continued success in the cellular handset space. We expect continued growth in Bluetooth product revenues driven by the following things. Number one, increasing adoption of Bluetooth within cell phones, two Broadcom continuing to add new cell phone customers, three the ramp of Bluetooth and other applications, such as PC’s, notebooks printers and headsets, and four a secret cause which is extensive set of Bluetooth software profile.

Our Wireless LAN products also experienced another seasonally strong quarter. As we look into 2006, we believe that the Wireless LAN market is once again poised for another year of growth. A key driver of this growth will be the migration to the next generations, either 802.11n based products the IEEE confirmed the 802.11n drafts specification on January 19. As a leader in the Wireless LAN market Broadcom has been a significant contributor to the IEEE efforts. We are excited to see 802.11n, overcome a significant hurdle in introduction. We believe we are well placed to take advantage of this migration to 802.11n and for a number of reasons.

First of all, following our highly successful 54G product release, Broadcom has a track record of success in insuring our customers that their products would be upgradeable via software to the final standard once it’s ratified. Second 802.11n offer significant throughput and rich improvements that could drive an upgrade of existing 802.11g and 802.11g products, third 802.11n opens up the opportunity for broad adoption of wireless multimedia distribution around the home in 2007 and 2008 and fourth we were able to integrate 802.11n functionality with in other devices such as broadband modems, Ethernet switches and set top boxes.

Moving on to our broadband communications target markets, most broadband communication lines of business experienced strong double digit growth rates in 2005. This was the advantage of our DSL business. There were two key drivers to our success; we were the first to market with ADSL2plus we believe with we are the market leader in ADSL2plus driven mainly by strength in Europe which we expect to compliment with a strong ADSL2plus ramp in China and North America beginning this year. Secondly, highlighting broadcast ability to benefit from both communication and convergence trends, voice enabled DSL modems went from close to zero our CPE port shipments in Q1, to over 30% in Q4. What’s also interesting is that, many of our customers that are bundled in DSL and VoIP are also integrating Bluetooth, the wireless LAN, did not a complete home gateway. This is important for a couple of reasons, not only DSL vendors have wireless LAN, much less Voice-over-IP and Bluetooth experience in this is case significantly higher ASP opportunity for Broadcom. By the way we are seeing any seasonality in our DSL business and in fact it’s got double digit growth in the Q1 driven by winning market share.

With respect to satellite set top boxes we continue to benefit from growth in overall subscribers, growth in the number of boxes per house hold, ramping with new customers and the mix shifts from standard definition to HD and CDR enabled boxes. Broadcom is experiencing stronger demand for next generation code access such as ABC, but also continued strong demand for MPEG-2 solutions. As we look into 2006 in addition to growth in each of our core broadband communication businesses we have another opportunity digital TV which we expect to become a revenue driver in the second half of the year.

In our enterprise networking target markets the migration with Gigabit Ethernet continued on its steady progression. Given our market share leadership position and product depth and breadth Broadcom experience strong quarterly and yearly revenue growth trends on both the client and infrastructure side. On the Gigabit Ethernet client side, Broadcom maintained its market leadership position as we surpassed the 100 million unit milestone last week. As we look out into 2006, two new product initiatives have the potential to drive additional revenue growth and potentially even more market share gains on the Gigabit Ethernet client side. These are one ramping new products specifically designed to address the white-box market. Remember the Broadcam is historically very strong in the OEM market given our products performance software suite and our big target market with new features. So this is expanding our market leadership into a new customer sell. You are a potential driver in 2006, if the expected ramp of our two hygienic products when Intel ramps its black core chipset for servers. Broadcom continues to broaden its product offerings to adjust customers Ethernet needs all the way from the cell phone market up to enterprise and now as well. In the cell phone market Broadcom begins shipping I new line of highly integrated 5 and 8 port Robo switches that will enable not only lower cost and smaller quick print designs but also more hardware and software features which significantly simplifying us with installation and maintenance. In the enterprise market Alcatel, announced it has choice our next generation StrataXGS III Ethernet switched silicon to power their OmniSwitch 9000 family of 10 gigabit Ethernet switches with data voice and video broadcasting services. Finally, earlier this week we announced our intention to acquire Sunburst Corporation. This will get us deeply into the enterprise course switch of lot of market but also in the dimension of Ethernet market. Sunburst brings Broadcom a complementary set of products flexible forward imaging flat at manager, and scalable switch fabric, is all at the team of 41 engineers to help accelerate the migration of the Metro Market to Ethernet, triple phase services are being offered by cable and phone companies, growth in Broadcom through-in through-out, the home and the lower cost profile of Ethernet-based networks are driving the migration to Ethernet in the metro markets.

So in summary, Broadcom success continues to driven by numerous large product cycles accruing between the communications and conversions end-markets. These trends are really happening today, our initiative is to be the leading communication semiconductor company and to engage these opportunities to the debt converts of our product line and in natural property portfolio and to superior execution. With that, I would like to announce the call over to operator for Q&A.

Questions-and-Answer Session

Operator

Thank you and we will now begin the question and answer session. If you have a question, please press “*” then “1” on your touchtone phone. If you wish to remove from the queue please press the “#” sign or the “#” and if you are using a speaker phone you need to pickup the handset first before pressing the numbers. Once again, if you have any questions please press “*” then “1” on your touchtone phone.

And our first question from Michael Masdea of Credit Suisse. Please go ahead.

Q - Michael Masdea

Thanks a lot, I guess I heard the talk on the most feasible areas as well, congratulations. And I guess somebody ask the obvious questions here which is, with the product cycle the biggest drift sometimes is this inventory or low in the ramp. You guys feel this comfort or what you guys comfort that we’re not going to see that any constituent given that strength that we see in last really three quarters?

A - Scott McGregor

When we look the cost of our products and then we talk with our customers. We believe the inventory situation is well under control. We actually have a number of customers who have been calling in through all the four quarter and our production in many cases was limited by how many chips we can produce rather than the customer demand. So we believe the inventory situation is well under control. But we do continue to monitor that.

Q - Michael Masdea

And I guess this is the follow up on that. There is some panic of course some signs of panic in the supply chain of our actually products and backend tightness and some reason somewhere in front of tightness. Could you talk about, just how you are handling that dynamic and again what is your comfort beyond inventory that your customers on and of course ordering too much based on that?

A - Scott McGregor

Well certainly there was tightness in the backend assembly and test in Q4, and I think the whole industry struggled with that a bit. But we continue to work closely with our customers and in many cases we have strong share in the markets, and have good visibility across a variety of customers. And we do our best access inventory and make sure it doesn’t get out of hand.

Q - Michael Masdea

Okay. And then just a last question on Sunburst, we look that is kind of a model is there area which you can kind of use this, its kind of a penetration trend for example, like Voice-over-IP, where you are normally on the client side, is it likely that you are going to start pushing more into the, more of the infrastructure and some of these other product area?

A - Scott McGregor

Well absolutely our goal is to really bring a lot of these technologies to bear and when you look at Broadcom it’s really the conversions we talked about where you can take the last of these recent technologies and combine it together. So we see this is a way to bring additional features. For example, a lot of carriers and lot of the service providers are looking a triple play or quadruple play opportunities. And frankly, there almost no companies other than Broadcom who can offer that type of technologies.

Q - Michael Masdea

Great, thanks a lot guys.

Operator

And our next question is from Raul Seymour from Deutsche Bank. Please go ahead.

Q - Raul Seymour

Thanks and echoing congratulations clearly here. In the prior quarter you talked about the diversity of your business inside that no single segment was over, 12% of revenues. Can you give us an update on what potent the biggest percent mix would be in this quarter?

A - Scott McGregor

That segment is still true.

Q - Raul Seymour

Okay and then beyond that the operating margin leverage I thought it was probably one of more impressive metric as you delivered. What sort of operating margin targets we talking about now, is that 24.5 normally or is that something is within that are realistic expectation as we go to 2006, as well?

A - Scott McGregor

I think it’s early to say that it is time for an update to our long term model which has been 20%, to 22%. We have always said we are happy to over achieve on that model. And certainly right now we have the capability of doing that, where we not, we comfortably evaluating that model. I would say we are not in the positioned either confirm or, change that model at this point.

Q - Raul Seymour

And the final question is on the multimedia processors, the optimized chip, is that still highly concentrated in one customer and if so, when do you expect diversification to occur in that?

A - Scott McGregor

We are shipping to multiple customers today. We do have one customer that was larger than the others. But we do see that diversifying will be coming more distributed as cell phone customers began to ramp up there as well.

Q - Raul Seymour

Okay, congratulations.

A - Scott McGregor

Thanks.

Operator

And our next question is from Arnold Shamroth (ph) please go ahead.

Q

Thanks, I remember this Wayne’s World movie where few were talking about but not being worthy but I’ll continue to maybe try to ask couple of questions here, one, a question of what seasonality can go both ways and obviously you’ve been worried about having seasonality in the first quarter that hasn’t tend out, this year you were accelerating throughout the year, is there any kind of qualitative content we can drive from ’05 patterns or is that too early to talk about in ’06?

A - Bill Ruehle

Because if they had a fast performance is no guarantee a future results, I think its, as you know and we’ve always really been product cycle driven, so I wouldn’t at this point we can’t really assume seasonality as one sort or another. As you know, we had originally called that we might be seasonally soften Q1 and we now believe based on our backlog and expectations but that’s not going to be the case. So where we go from here in terms of sequential increases, we’re not prepared to your guidance beyond the first quarter.

Q

Thanks Bill and one another question, real quickly excluding server works, you talked about that was down 200 million, was it’05? What kind of growth rate do you think you saw in ’05, was it 2 or 3 times your, the actual number, then I have quick follow up please.

A - Bill Ruehle

Well, we were up by $270 million, so with out the servers decrease it would have been 470, so we can do the marathon that whatever that number would come out, I haven’t calculated it.

Q

Thanks and then one quick question on the handset baseband market, it seems like as if all your, wherever you are in the market that’s the once place where you are not, maybe a top 3 player at this point, maybe I am wrong on that, but it seems like at least it was significant one. Could you talk a little bit about where we are in terms of rolling out, are you have design wins, are you an IOD testing or are these sort of if there is still we can content increase that you are expensing in with some of these customers, or do you have your in Bluetooth that your are selling page went into that, that would be great, thank you.

A - Scott McGregor

Let me separate it in 2G and 2.5G where shipping base been today and in fact that was the reason why our sailor groups had tight good revenue in Q4. In terms of 3G we do have multiple designer wins and we expect to see significant revenue from that of a second half, not so much in the first half. But will begin in the first half to see some of the products going out.

Q

Thanks Scott.

A - Scott McGregor

Welcome.

Operator

And our next question from Cody Acree from Stifel Nicolaus. Please go ahead.

Q - Cody Acree

Thanks guys, and echoing congratulations. Maybe following up on 3G can you just talk about what at years in and on the 3G base stand side that is earnings the business, what metrics are you really been differentiation is.

A - Scott McGregor

Well that’s a very good question because, if you look at it, in the last 5 years, no major handset vendor has changed their baseband supplier. And so as the reason for that is because the software and all the rest of the work that they do to support a baseband is quite high and so there has to be a very compelling reason for them to change. So given that we have a number of compelling reasons, one of them is we have a very competitive product, there going to make lot of things into a single base band ship, we also are one of the only companies that can show them road map that only shows all the baseband technologies, but it shows all of the media and connectivity technologies like Bluetooth and wireless LAN, and a road map that can integrate those all together in the future. And that’s was really compelling for these guys and they are eager to find some one who can take them on that road map.

Q - Cody Acree

Is there any…

A - Peter Andrew

Cody this is Peter Andrew, this FYI you might want to come buy 3GSM both, where you can give more details what we are exactly doing differently in other new technologies that we have our unique which is enabling us to become a bigger player, not only in the 3G markets but also in the 2.5G markets.

Q - Cody Acree

Thanks and is there any particular segment or is there that nature of the wireless base that have you’re finding yourself with more traction end or this is more attractive to?

A - Scott McGregor

I think it’s a matter of timing, we entering things likely to in wireless LAN a number of years ago. And we’ve been able to achieve, #1, #2 positions in those phases, in a fairly short period of time. We relatively new into areas like Cellular and some of the other wireless technologies, but we entered to win and so our goal is to become a top player in each of those technologies.

Q - Cody Acree

And then just lastly you mentioned DSL would be up in the first quarter, can you talk generally about some of your other segments at least directionally, though it might have some sequential impact on those fronts.

A - Scott McGregor

Well I gave some clues in the previous dialogue, in terms of what strong, and I can’t breakout though the specifics ones for you Q1 sorry.

A - Bill Ruehle

But one comment we did make already is as we expected as a whole that our broadband group would be the strongest grower in Q1.

Q - Cody Acree

Okay, thanks guys and congratulations.

A - Scott McGregor

You’re welcome.

Operator

And our next question from Alex Gauna from UBS. Please go ahead.

Q - Alex Gauna

Yes, thank you. I was wondering if you could go into developments on the Voiceover IP front, but firmly product line standpoint, I believe cable is an area where you are experiencing success, but also in dedicated Voiceover IP applications and maybe even as a percent to WiFi going into VoIP telephony.

A - Scott McGregor

VoiP is one of those horizontal technologies that applies in a lot of different areas, and so the breadth we have enables us to do that, we demonstrated at CES a wireless VoIP phone based on 802.11n but also to video, so there is an example of a standalone phone and we’ve seen a lot of interest both for the video as well as the non-video versions of VoIP phones, from the major players in the VoIP phone market. One of the things that particularly exciting though it adding VoIP capability to both DSL and cable modems and that market we think is really poised to grow, but the interesting things about that is that the cable operators can employ a voice enabled modem into a household and then down sell the capability to replace your phone service. And so it’s easier for them to put the voice capability in now, rather than waiting for the customer to actually water it, because it saves a truck holder to replace the modem. So we are seeing very strong pickup of voice in both of those markets and expect that to be a revenue driver for us going forward and it dramatically increases the average selling price of our cable modem and DSL.

Q - Alex Gauna

Is there anyway you can quantify how big this is getting for the company in terms of fractionate sales or growth rate.

A - Scott McGregor

We don’t quantify it for the company, but Peter you might have the statistics on the growth rate VoIP penetrations into those markets.

A - Peter Andrew

Sure, well just to put into perspective I’ve got the DSL data here in my finger tips. If you look at roughly Q1 it was essentially 0% of our unit that we are shipping in the DSL space with VoIP-enabled. But the time we are into the Q4, we are probably around 30% of the DSL modems that we were shipping were VoIP-enabled. And I would say that’s, answering Q4, it’s about the same metric also for the cable modem side in terms of being voice enabled. Also remember that just one new feature and function that we could add to those platforms, will also WiFi and Bluetooth, but we are seeing a lot of take ups especially in the European markets, of that complete home gateway solution.

Q - Alex Gauna

All right, thank you, one more if I could, are there any customers approaching the 10% mark or because of the diversifications happening are we on the cost of loosing Motorola, the 10% customers perhaps?

A - Scott McGregor

Well actually when we look at our, if you look at it on an annual basis, we actually see that our customers are diversifying. So we are seeing more and more large customers which means the impact of anyone customer goes down.

Q - Alex Gauna

Okay, thank you very much and congratulations powerful quarter.

A - Scott McGregor

Thank you.

Operator

Our next question comes from Seogju Lee from Goldman Sachs. Please go ahead.

Q - Seogju Lee

Hi, thanks congratulations. I don’t mean to be the one that brings the patent, in terms of DSO expense as we go into 2006, when we have the mandatory expensing there, can you just help us frame to expense, if your other estimate what it was in Q4 and how we should think about in Q1. And also to Bill if you could just give the tax rate expectations for Q1 within, with out that’s why they are being very helpful. Thanks.

A - Bill Ruehle

Okay, first of all tax rate expectations for Q1, on a pro forma basis remains at 10%, on GAAP it will harder to predict its typically it being running a little better than that on GAAP. In terms of what we expect DSO expense to be, first of all there is 2 line items on our current P&L, where they’ve already recognized our equity expense, those are the deferred compensation that relates options from people who work for our companies we had acquired. And also the restricted stock units we grated lives to, those already hit the P&L. If you look at our past 10-Qs, on the disclosure basis, has we been expensing options it would have been the total all end cost including RSUs and the other, I am sorry prior to acquisitions would have been above $100 million a quarter. For Q1, we expected to be probably little bit less than that, there is the more the old legacy options drop off and so there will be something under 100 million of expense for Q1, and out of that $100 million and some of them would have 25 million of that would already be incurred through because if you like to restricted share units or to deferred counts from acquisitions. Does that help you Seogju.

Q - Seogju Lee

Hi yeah, just on that 25 million that’s already incurred, that’s been in the pro forma numbers that’s pulled out right?

A - Scott McGregor

Thanks corrects, that does not show up in the pro forma number.

Q - Seogju Lee

Okay, thanks.

A - Scott McGregor

And we expect going forward we will continue to report both ways of it, we will get complete transparency in terms of what those expenses are and what the ongoing operating expenses are.

Q - Seogju Lee

Great thanks, and then lastly just on DSO, in terms of the share dilution at the analyst meeting if I recall correctly you talked about sort of targeting a net share dilution of about 3% with gross dilution of about 5% to 6% offset by share buyback, is that how we should think about it, and I guess with the new expanded repurchase program, I think you mentioned it takes about 2% of it.

A - Scott McGregor

That is correct, so yeah those number should also with in the right names.

Q - Seogju Lee

Great thanks again congratulations and good luck.

A - Scott McGregor

Thank you.

Operator

Our next question is from Ambrish Srivastava with Harris Nesbitt. Please go ahead.

Q - Ambrish Srivastava

Hi guys, Bill question on gross margin, you have navigated the current slightness both in the backend and the front-end, pretty nice to be here. How should we take it to the rest of ’06, for gross margins, you are wrapping several new products, that doesn’t necessarily related into lower ASPs?

A - Bill Ruehle

That’s true, and as you know there is a whole lot of components to gross margins, so on the cost side its going to be harder, we believe that will be harder to come by significant decreases in our foundry cost just be negotiating better cost for the same part. Because capacity is tighter now than it had been. However, we continued to have aggressive programs to reduce cost and products by improving the products and sales and also we have expanded our second sourcing so that we can get to some better cost data there. We will be more dependent than ever on what’s happening on the selling price side, and that’s always a little bit unpredictable again to the extent, we are in the right point of product cycles, that seems to be favorable for us. We can, for the last few quarter, if you recall back in early 2005 we said we, we thought we are seen spike and we expected to comedown very quickly, we’ve been happy to report its come down much less quickly than we have, that there still has been a trend line of our reduction in gross margin each quarter going forward, and we think for Q1 we are flat to possibly slightly down little bit for that period. So I think that kind of a trend line is probably most realistic to assume.

Q - Ambrish Srivastava

Okay, thanks Bill. A question for you Scott, lot of growth drivers going on, if you think to ’06 how would you rank order the top 3? And I realized in each of the 3 segments categories, there are several as you could please just give us a top 2, thanks?

A - Scott McGregor

I think that’s hard to, and as you pointed out we do have a lot of different growth drivers, so it depends a little bit how fast, for example 802.11n rolls out this year. So, it will be a little hard for us to pick the top 3, but there are lot of them in every single area and I think that’s something different about Broadcom than many other companies, many companies are bidding on 1 or 2 growth drivers and we have a dozen or more.

Q - Ambrish Srivastava

Thanks Scott, and thanks Bill.

Operator

Our next question comes from Jeremy Bunting from Thomas Weisel. Please go ahead.

Q - Jenny Shea

Good afternoon, this is Jenny Shea calling in for Jeremy. I just want to kind of hold in on your communications and convergence being here, you gave sort of market, adoption growth rate for your Voiceover IP shipping to adjust on cable modems. I was wondering in terms of the other ingredient technologies that you mentioned earlier, which one that you just expect to also experience similar growth rate in terms of units in convergence for ’06?

A - Scott McGregor

We believe that Multimedia is a really big area and today we are seeing that start to deploy in handheld devices, but just the ability to handle Multimedia and HD video streams and things like that, across the PC markets and other things. We think its going to be big. So taking that video technology and applying it for all the different devices is certainly a big area of convergence, also if you take voice we mentioned Voiceover IP applying to a number of different areas, and also bringing data to things like Cell phones, Cell phones will become more sophisticated will be able to run more applications to process data as you get some of the 3G cellular standards like HSDPA, HSUPA you will get decent data rates to the phones, which will make them a more attractive device for some of the personal information management kind of applications. So those are a few, but we see it as a very pronounced theme and driving a lot of the direction we are heading with our products.

Q - Jenny Shea

Okay, and I just a quick question on ADSL, do you expect to have any sort of product shipping towards the end, yeah I know you are more focused on ADSL2Plus you have the nice design win attraction there, which is not going to change, but for ADSL2.

A - Scott McGregor

But we see the ADSL2 market is something that will happen more towards the end of this year. We certainly have some products there today and doing in and our ability testing with other semiconductor suppliers, so that’s gone quite well. So we have design wins and again that’s something that’s going to ramp more in the second half. The story today is pretty much ADSL2Plus.

Q - Jenny Shea

All right thank you very much.

Operator

Our next question comes from Charlie Glavin from Needham & Company. Please go ahead.

Q - Charlie Glavin

Thanks, I guess I will trying to book a little bit longer term as you guys, just a little bit carried I think, that you guys post that well and still had a couple of areas you could have done that better. Scott in regards to kind of going back to Michael’s question about 10% giving into the infrastructure side. Given that Intel was a big investor in that, in terms of VoIP it seems that the carrier market maybe a little bit, the most of the deployments were over there, are revolving out, is this more of a apply from the infrastructure side targeting the enterprise side as VoIP start to rollout there, and also in terms of taking a look at the underline architecture, we will be looking still in maintaining the net to also, kind of leveraging to some of the power quick or types of that power bases based on some of the feedback from Cisco?

A - Scott McGregor

Well certainly we will see this is, as enterprise, but again it’s also a play for us in the metros, it’s a new area for us, we didn’t scale into that states in the past. Its kind of interesting because there is a transition going on where today, a lot of the players in that space use custom Silicon or their basic strategy to do that and there is transition that’s going to happen there to merchant silicon. And Broadcom wants to be the one to really jump on that and make sure that when they do transition from doing their own 86 to buying merchant silicon we wanted to be ours. So that motivated the timing of the Sunburst acquisitions a little bit. In terms of MIPS, MIPS has a lot of work still ahead and so we believe you can create very fast causes through in that space and in fact we put together broader team has invested over the last quarter, to increase the capabilities of our MIPS core team do faster, processors across the wired range. So we are still bullish on that.

Q - Charlie Glavin

Okay, kind of expanding on that, even that Sunburst, I believe lot of that shouldn’t so far has been more with in the regional networks for IPTV, Video on demand you mentioned in terms of lots of code action multimedia being a little bit stronger. What area can we look forward speaking in ’06, as far as maybe additional left side during your call really when you are down and now stated 802.11 and the point was right about a lot of the, this person is still with uncompressed type of video, is this kind of on the big target areas in terms of such as metro and some of the video on demand, but also in terms of gateways particularly with in the cell phone market.

A - Scott McGregor

Well I think it was very different market, so I mean certainly the high-end video on demand market is going to big going forward, you are actually right, using some of the codec technology we have, will enable much better efficiencies over those networks, because you can send the same TV program and have the bit or less. So that’s certainly a good combination between the Sunburst technology and codec technology that we have, either SOHO market that’s both there is a client opportunity, but I believe the home gateway market is going to be interesting. Its sort of curious to watch, because there is so many contenders for that market, between the set top box guys and the network guys and the TV guys and the PC guys and what not, and our position on that is diagnostic and then we want to be able to have all the technologies and so who ever wins in that space we want to be the ones who provide the silicon forum and so that’s why you see us doing acquisitions to cover all of that, we have basically everyone of the last mile technologies covered, and we want to cover all of the multimedia and codec technologies as well. So whatever wins we are there, a good example of that is in the HT-DVD space, you saw us announce a chip there that supports both blue ray and HT-DVD, both on Microsoft Codecs with BC1 as well as the H264. So we are really trying to make sure that we’ve got all the bases covered and we are the player that can integrate all of those pieces.

Q - Charlie Glavin

I guess one last question on that as you mentioned as far as covering all the baseband technology, certainly pitching the eye work, where the semi area and with Sunburst its certainly lays out a good 10 big types of server and that, but what about in terms of some of the low lying beam as far as instant demand or even working a lot closer will favor you and that’s the out the world.

A - Scott McGregor

Well we certainly support integration with those things, but to be honest we believe in Ethernet, we believe Ethernet’s going to eventually be able to surpass a lot of those markets. May be not today, but when you start getting the ability to use the same cable and use the same protocols and fall back to the slower speeds, but also support the higher speeds, 10 gig Ethernet, rolling out over the next few years. We think that’s going to be the big player and so we got most of our chips on that.

Q - Charlie Glavin

And then certainly Greg, do you think the technology could take the top line of the business; it doesn’t some of the legacy issues when it’s the ability as far as penetrating in some of the deeper areas of the infrastructure side?

A - Scott McGregor

We don’t think that’s an experiment but that’s a good one take off.

Q - Charlie Glavin

Okay, thanks. Bill I’m sorry one at the housekeeping in terms of stock options is there anything in terms of the high restricted stock that would cause different taxation on those are would you reporting right now that we seem that close pretty much true?

A - Bill Ruehle

Yeah we have enough tax coverage from other items that we won’t be relying on the tax reduction from options.

Q - Charlie Glavin

Okay thanks.

A - Bill Ruehle

So you don’t ask me about the licensee.

Q - Charlie Glavin

You’re too quick. Thanks Bill.

A - Scott McGregor

Adam?

Operator

And our question is from Brian Alger from Pacific Growth Equities. Please go ahead.

Q - Brian Alger

Hi guys, one of the questions have been asked and answered but just kind of solving into this conversions payment, it does seems as though you guys are getting very aggressive in terms of positioning for this conversions from the home whether its digital media that after a gateway, set top box, et cetera. Today we haven’t seen much in the way of television penetration. And I know you guys have, have some work going on there. When do you think that the display area itself is going to pose a, another arena of growth for Broadcom?

A - Scott McGregor

Well there are number of ways we could look at that displays our monitors today. Certainly don’t represent a silicon opportunity for our current product. That going to be very simple display drivers and our power supply chips and generally we don’t play the end market. Going forward, I think there is an opportunity as the monitor makers to look at the opportunity to add a sub $10 chip to a video monitor and make into digital TV. It gets very attractive, but you just stop shipping monitors and everything as TV. And you have a TV in every laptop and a TV in every PC, one of things we see as an opportunity is to take our very strong set top box technology moves that over into the digital television space. After all a digital television is basically a set top box that has a monitor and subtract the two things. So by creating some chips there, we believe we can go after that space and make it very attractive to make TV capability basically, you think it would surpass all the different products.

Q - Brian Alger

Okay and that leaves to my follow-up you’ve obviously, sort of some areas of our product in IP portfolio to strengthen your positioning. Do you think you need to acquire additional IP to maybe strengthen the position for the display markets? Or you guys sell it what you’ve got?

A - Scott McGregor

Overall, we always looking for opportunity to get the market faster or get access to other customers. So I wouldn’t exclude it but we certainly have the capability today, to do digital television and to expand that into the displays that become TV market. I don’t think it’s particularly interest to do power supplies and things like that. We are not a commodity semiconductor supplier we provide the high-end SOC, but to the extend those become part of the display market will certainly play there.

Q - Brian Alger

Okay, given the margins fresh, I think anybody is going to play your commodity player, that’s right guys.

A - Scott McGregor

Right.

Operator

And our next question is Bill Lewis from JP Morgan. Please go ahead.

Q - William Lewis

Thank you, and good afternoon. In the mobile and wireless business, obviously some strong growth I think you said of 44%. Is there any comment breakdown or insights you can give to us and to the contributions from Bluetooth and wireless LAN. I understand Bluetooth have the largest piece but, maybe seasonally when you are grounded much about certainly it clears that, it did as if, kind of try to assume the kind of great somewhere later, any insights there?

A - Scott McGregor

I’m sorry we don’t break that down. So I can’t give you the exact number but we do believe we took share in the Bluetooth market in the fourth quarter.

Q - William Lewis

Okay. So the kind of both grew, at something around that rate, would not be a bad assumption.

A - Scott McGregor

We can’t go into that level in detail.

Q - William Lewis

Okay, one area you didn’t talk about was storage, as I missed too much, can you kind of insight to me give on, do you think ’06 might be year that starts to develop or what do you think there?

A - Scott McGregor

Well, we certainly look at that, I mean we didn’t mention it, because we have so much of kind of things to talk about but that certainly a market we continue to monitor and look at.

Q - William Lewis

Okay and then on 3G lastly is there any updates you can give in terms of, you talk about two large OEM win any kind of additional updates there. Or additional customers you gained in the last quarter?

A - Scott McGregor

I’m afraid that prior to launching phones our customers are kind of shy, so we are not able to share any more details here. But we certainly will, when we can and those fell throughout the market.

Q - William Lewis

Okay, all right thanks.

Operator

And our next question comes from David Wu from Global Crown Capital. Please go ahead.

Q - Hung Lee

Hi, this is Hung Lee for David Wu. Thank you for taking my question and congratulation on the strong quarter. With as many new product lines going into the fact later this year or sometime in the mid of this year, do you expect any slow down in revenue due to product auditioning of your customers. Or do you expect, the revenue to be strong throughout the whole year?

A - Scott McGregor

Well let me see if I can help you on a question. We don’t give guidance beyond the next quarter. So I can’t tell you anything in terms of future quarters. On the other hand there is nothing inherent in our models in transitions that will cause us to, have a revenue gap in our current customers as we transition to new product. Generally they buy product today and when we come up with the new product they buy the new product and one of our goals is a company has to add enough value and new futures to the new products. So that they have an ASP equal to a higher than the products the customer already buys.

Q - Hung Lee

All right and congratulations on the quarter, thank you.

Operator

And our next question comes from Jeff Palmer from Freidman Billing Ramsey.

Q - Jeff Palmer

Yes, thank you for taking my call. I’m not sure if you would address this or not. Could you gives us a thought DVBH and when we can expect to see Broadcom intersecting that technology associated with the acquisition of the Athena?

A - Henry Samueli

Sure, this is Henry, yes DVBH is definitely an active area of R&D and the company as you mentioned with the Athena we have the RFID and we are of course working on the demod piece we have multimedia piece with the video core technology that we acquired from Apple Music. So all the pieces are following into place and it is a major focus of activity right now. So I don’t have any specific data’s to when will introduce our compete solution, but we are very active in that area.

Q - Jeff Palmer

Have you guys could say is it fair to assume which you’ve already out engaging with major OEMs or as I understand that there is already been kind of a first cycle design awards given for the early cash with Verizon and people like that.

A - Henry Samueli

Yes we are working with the major OEMs on reference designs and working with our product yes.

Q - Jeff Palmer

Great, thank you very much best of luck.

A - Scott McGregor

Thank you.

Operator

Thank you, and our next question is from Ruben Roy please go ahead.

Q - Ruben Roy

Thanks. Scott when you mentioned Bluetooth share gains at 4Q, can you characterize the applications possibly where you think you could share perhaps Notebook or PC, or headset how that works and, how that works going out into 2006?

A - Scott McGregor

Well the biggest opportunities of Bluetooth, of course these days is cell phones and I think that dominates all of the other markets right now. We are starting to see markets like automotive and PC and some of the handheld consumer devices begin to show up as markets. But for the next year the handsets is where it is, we have design wins with most of the major handset manufacturers. And so that’s where lot of our share gains have come from, as we get additional customers in that space and as they ramp their models up for some customers we have engaged with relatively recently and so as they populate our Bluetooth solutions especially our new 2045 chip that has enhanced data rate, and all the difference profiles, those are beginning to ramp up and so that’s driving the additional share gains in those companies.

Q - Ruben Roy

Okay, thanks and on, anyway Ethernet you talked about some of the product initiatives that clearly expands your clients and going into ’06, from infrastructure side, how does the option rates, how does the option rates going and where the penetration is and where the opportunities switching next year?

A - Peter Andrew

Sure this is Peter, if you look at some deliberate data I believe last quarter, the estimated that the penetration rate of Gigabit Ethernet into the hub, switch and the router market was right around 36%. The good news is if you look forward based upon their expectations there are looking for a nice steady increase in terms of penetration rates. I think if I look at the numbers they are expecting I believe by the end of 2006 to roughly end the penetration rates right around 42% to 45% of the imports that are being shipped.

Q - Ruben Roy

Great thanks Peter.

Operator

And our next question comes from Adam Benjamin from Jefferies. Please go ahead.

Q - Brian Curtis

Thanks good afternoon. This is actually Brian Curtis for Adam. I wanted to, you simple mentioned 802.11n as growth of in ’06. And if I am correct I think wireless LAN ran through last couple of quarters here maybe three, if you want any, I mean what is the prospect for ’06 and could you just, business unit growth, kind of, at the overall average?

A - Scott McGregor

Well its hard to speculate exactly what the growth rate will be, so I can’t answer you question is to whether the average or not, I think the two big growth drivers in the 802.11 space besides just the increase penetration of 802.11 into various devices, 802.11 in general has come down in price over the last couple of years, so that is very cost affective to make, just of our any device that cost more than $100 and afford to have a 802.11 networking in it. What we see as drivers going forward, our 802.11n which really improves both the performance as well as the range, did you get a factor of two better range and a factor of four more in performance. So we think people will pay for that and that will give us at average ASP increase across our, our range of 802.11n, 802.11 solutions. The other thing it’s going to drive it, I believe over the next couple of years is when we see the embedded space begin to pickup, its been fairly small to date, by overtime we believe 802.11 will go into things like cell phones, like games and other consumer devices and so there is an opportunity there as well that we hope to play and, so I, I believe there is a good future for 802.11 as a market, certainly the number of earrings will grow up dramatically and 802.11 and give this ASP outlook and that it gives us a big margin increase.

Q - Brian Curtis

Thanks, and then just, kind of going back in this mobile convergence, I mean, that means, you have all the components Wireless LAN, DVBH, Bluetooth, kind of, I wanted to need this rank, kind of those separate opportunities in the cell phone and also new, where do you see kind of convergence to those devices been appropriate, I know in a mobile talking Wireless kind of Bluetooth and third has Bluetooth and GPRS, just wondering what you call it from?

A - Scott McGregor

Well I’m going to decline the rank and I think its going to depend really on, on how far those market grow and it’s a little high to forecast that, its one of the reasons we want to make sure we cover all of those, so we get the best covered. Its interesting if you look at where the convergence is going to happen, we’re seeing Bluetooth as something with base convergence for example there are lot of cell phones we have a Bluetooth and FM radio in them and lot of headset makers want to save a chip and so it doesn’t logically make sense to the Bluetooth and FM radio together but it saves board space in the cell phones and the, the headset makers want it so that’s a big opportunity and I think most of the Bluetooth sockets that are out there today will change the Bluetooth that down over the next couple of years and that will reduce some of the suppliers. The baseband is a big discussion our how fast that has been, there is some people do believe the baseband was sort of vacuum of all the other chips in the phone and there are others who believe that as for as since it evolves particularly they will stay separate, I think both are probably right in the low-end market, I think the baseband will tend to stimulate the rest of the pieces in the higher-end phones and the more feature rich phones. I think you’ll see rapid evolution of the different connectivity in multimedia and other pieces, so that won’t happen so quickly. And that’s why you see as adopted strategy of making sure we got all those basis covered, because if it goes to a depth star baseband model we can play in that game and if it goes to the best of remodel on the parts we play there as well.

Q - Brian Curtis

Thanks.

Operator

Thank you and we have no further questions at this time.

Scott McGregor, President and Chief Executive Officer

I would like to thank everyone for joining us today, appreciate your questions and we look forward to seeing you in the quarter, thank you very much.

Operator

Thank you ladies and gentlemen this concludes today’s teleconference. Thank you for participating. You may now disconnect.

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Source: Broadcom Q4 2005 Earnings Conference Call Transcript (BRCM)
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