iPhone a huge boost for Broadcom
Posted
May 30 2008, 12:59 PM
by
Kim Peterson
Rating:
Broadcom shares have jumped more than 6% today to $28.85, and it's all because of Apple's iPhone. Broadcom, a chipmaker, is rumored to be the company supplying the global positioning system in the new 3G iPhone expected out next month.
If that's the case, expect a bright future for Broadcom, a company which hasn't had the best year. Regulators recently accused the company's co-founders of falsifying income, and have charged two other executives in the case. Some of them may face criminal charges. Broadcom reported $3.78 billion in sales last year and a $213.3 million profit.
I'm a little confused about the GPS rumor. Broadcom began shopping its 3G phone chip around last year, and while the chip had a bunch of bells and whistles, it was lacking GPS capability. So while the chip may be perfect for the iPhone, the GPS technology would have had to come from another chip, according to Ars Technica.
Neither Apple nor Broadcom are commenting on an official tie-up. But Friedman analyst Craig Berger says the Apple ripple effect will be good for chip companies going forward. He's expecting the Philadelphia Semiconductor Index to retreat a little before jumping from 420 to 475 later this year.
That could be good for Broadcom and other stocks, he said, such as Marvell and On Semiconductor.
