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Samsung Tops Apple as Broadcom’s Biggest Customer

Samsung Electronics Co. has surpassed Apple Inc. as Broadcom Corp.’s largest customer.

Samsung, the world’s largest consumer electronics maker, accounted for $1.3 billion of the Irvine-based chipmaker’s record $8.01 billion in sales in 2012, according to the company’s recently released annual report.

South Korea-based Samsung’s total came to 17.3% of Broadcom’s revenue, ending Apple’s two-year run as the company’s top customer.

Sales to Samsung grew from a 10% share in 2011, and they were likely driven by hot sales of the company’s Galaxy S3 and S2 model smart phones.

Samsung last month announced that the Galaxy S3 model surpassed 40 million unit sales globally in its first 20 months on the market.

The strong S3 gains pushed sales of the Galaxy S series of smart phones beyond 100 million units, Samsung said, with the S2 model ringing up sales eclipsing 40 million units since its launch nearly two year ago.

Broadcom is known to have its Wi-Fi chips in both models, and its combo Bluetooth/receiver chip in the Galaxy S3 model, according to San Luis Obispo teardown specialists at ifixit.com.

The combo chip reduces power consumption by 40% to 50% compared to previous versions, according to industry experts.

Broadcom’s sales to Apple also increased in 2012 and now account for 14.6% of the total, up from 13.1% in 2011. Broadcom is known to have a slew of chips embedded in products from the Cupertino-based company, including iPhones, MacBook Airs, iPods and other products.

Apple sold a record 47.8 million iPhones in the December quarter, up 29% from a year earlier. The product line—Apple’s largest source of revenue—drove record quarterly sales of $54.5 billion and profits of $13.1 billion.

No other customers accounted for more than 10% of Broadcom’s annual revenue last year besides Samsung and Apple.

In 2011 Apple accounted for 13.1% of the company’s nearly $7.4 billion in revenue, or nearly $970 million in sales.

Broadcom could be in line to further grow sales this year from Samsung as the company preps for the Galaxy S4 launch, which could be introduced later this month at the influential Mobile World Congress in Barcelona, Spain.

Samsung projects to sell some 510 million smart phones in 2013, boosting earnings by some $8.3 billion.

“We expect that our largest customers will continue to account for a substantial portion of our total net revenue for the foreseeable future,” Broadcom said in the annual report.

SearchCore Into Tattoos

Lake Forest-based Internet and app marketer SearchCore Inc. has entered the tattoo business, an industry the company cited in a recent Business Journal story as a likely target for expansion as it distances itself from the medical-marijuana sector.

SearchCore—which sold WeedMaps Media and its subsidiaries SafeAccessMD and MMJMenu.com in late December to an undisclosed European company for more than $11 million—has signed a deal with tattoo.com that could lead to an equity stake.

The contract calls for SearchCore to develop and improve website design and boost marketing, as well as implement a social media plan and search-engine-optimization technology.

The deal calls for SearchCore to get 70 cents of every dollar it drives in sales, along with the potential for an ownership stake in tattoo.com, according to Chief Executive Jim Pakulis.

“If we hit certain predetermined milestones on an annual basis we automatically receive up to 50% ownership in tattoo.com,” he said.

Tattoo.com is set to relaunch as a premium finder site in early March.

SearchCore’s new strategy is largely grounded on the success and technology of weedmaps.com, a finder site for medical marijuana dispensaries that drew more than 10 million page views per month, according to the company.

The bid in the tattoo business will follow a similar template, where ink seekers can scroll through parlors, artists, their work, pricing, reviews, and forums, according to the company.

The U.S. tattoo and removal industry sees some $2.3 billion in sales annually.

SearchCore has already enlisted about 3,500 tattoo shops to include in its database, according to Pakulis.

That’s a fraction of the estimated 25,000 tattoo stores and more than 100,000 tattoo artists in the U.S., but “10 times as many stores as our most recent finder-site success,” Pakulis said.

SearchCore’s recent deal to acquire the technology behind Sports Asylum Inc.’s mobile app Sportify underscores its efforts to become a clearinghouse for fragmented industries.

Sportify, which is expected to launch in the coming months on Apple Inc. devices, fuses social networking with recreational-sports enthusiasts.

The app and pending Web-based platform will allow users to connect, schedule, review and participate in some 90 different recreational sports in a covered geographic area.

The company plans to roll out a similar strategy for manufactured homes, a niche segment that peaked in 2007 and bottomed out two years later in the heart of the recession.

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