NEW YORK Feb 12 Broadcom Corp said
customers are now testing its first chip based on the latest
high-speed wireless technology, creating new competition for
bigger rival Qualcomm Inc, which was years ahead of the
rest of the market.
Broadcom said on Tuesday it expects its chips for Long Term
Evolution (LTE) high-speed devices to go into production in
2014. Many of the world's biggest service providers are building
or already offering services based on LTE.
Broadcom, the maker of chips used in devices from companies
such as Apple Inc and Samsung Electronics Co Ltd
said in December that it would start sampling its
LTE chips in 2013, but it did not say when exactly,
disappointing some investors at the time.
Rivals, including Intel Corp, Marvell Technology
Group Ltd and Nvidia Corp, are expected to
follow shortly with their own LTE products, further heating up
But Broadcom may have better chance than most of Qualcomm's
rivals if its customers like the product, Brean Capital analyst
Mike Burton said.
"Broadcom has the scale that's going to be required to be a
successful supplier going forward," Burton said.
He added that phone makers will be anxious to add at least
one more supplier of LTE chips to improve their negotiating
power and so they do not have to depend on one supplier in case
"The (device makers) want choices. They want somebody to
keep Qualcomm honest," he said.
Broadcom shares were up 34 cents, or 1 percent at $33.73, in
afternoon trading on Nasdaq, where Qualcomm shares were down
$1.10 or almost 2 percent at $66.08.
J.P. Morgan analyst Rod Hall downgraded Qualcomm stock to
'neutral' from 'overweight' earlier on Tuesday due to concerns
about slowing growth in the smartphone market.