Broadcom Corp.’s recent third-quarter earnings report and analyst conference call highlighted some lingering problems the Irvine chipmaker has had in gaining design wins for chips in low-cost smartphones.
The company lost business to San Diego rival Qualcomm Corp. on a series of cheaper smartphone models in the past few months, including the HTC One Mini, Samsung Galaxy S IV Mini and the Motorola X, sparking renewed worries on Wall Street that its market share is slipping.
Broadcom has said its share is stable as new design wins with higher-end smartphone makers offset losses in the lower-end segment.
“I think we have more challenges with the platform designs of competitors in the lower-end space … particularly in China,” Chief Executive Scott McGregor said in the conference call. “That’s been the fastest-growing part of the market in the last quarter or so. But at the high end, I think we continue to see very good technology and strength.”
Broadcom is the market leader in connectivity chips that power Wi-Fi, Bluetooth, GPS and other applications, with a nearly 33% share, according to analysts at Boston-based Trefis.com.
The company projects revenue in the December quarter of between $1.91 billion and $2.03 billion, below Wall Street expectations of $2.13 billion.
Watching Activision
It bears watching to see if the parent of Irvine-based Blizzard Entertainment Inc. will change its corporate strategy, now that the video game maker has regained independence from French conglomerate Vivendi SA.
Investors and company watchers might get an answer this week when Santa Monica-based Activision Blizzard Inc. reports third-quarter earnings.
Activision acquired some 429 million shares from Vivendi last month for about $5.8 billion, while an investment group led by Activision Chief Executive Bobby Kotick and Co-Chairman Brian Kelly bought 172 million Activision shares from Vivendi, a roughly 24.7% stake, for about $2.3 billion.
Vivendi now owns about 12% of the company.
“With the completion of this transaction we open a new chapter in the history of Activision Blizzard,” Kotick said after the deal. “We expect immediate shareholder benefits in the form of earnings-per-share accretion and strategic and operational independence.”
Newport Corp. Plans Unit Sell
Irvine-based laser maker Newport Corp. plans to sell its micro robotics systems business unit for more than $6 million to an unnamed private investment group.
The company, under terms of the deal, will receive $5.3 million in cash at closing and an unsecured $650,000 promissory note that carries a seven-year term and 5% interest rate.
The buyer is expected to sublease Newport Corp.’s Massachusetts facility and retain all its employees in the division.
The deal is expected to close before the end of the year.
The line, which focuses on developing and manufacturing die bonding systems, generated about $12 million in revenue and essentially no operating income or cash flow in the 12 months through September.
Die bonding is the process of attaching a chip to a substrate.
The business line no longer fits into Newport Corp.’s long-term strategy as it zeroes in on its core business of lasers, optics and photonics technologies, according to Chief Executive Robert Phillippy.
Newport makes lasers and related controls and equipment for telecommunications companies, chipmakers, researchers, medical companies and manufacturers.
The company posted a net loss of $89.4 million in 2012 on sales of $595.3 million.
