Wednesday, February 16, 2011

Mobile World Congress: Tidbits On Intel, Motorola, Marvell

Estimates are some 75,000 people are in Barcelona for the Mobile World Congress this year, kicking the tires on phones and base stations. (Sadly, I’m not there, though I love ceviche.)

Herewith, some tidbits from daily notes sent by various folks on the Street:

Jeff Kvaal, Barclays Capital: Motorola Mobility’s (MMI) “presence was strong” at the conference. Business at Verizon Communications (VZ) has not been as bad as feared given the arrival of Apple’s (AAPL) iPhone. A slew of announcements by Juniper Networks (JNPR) regarding its next networking infrastructure push, “MobileNext” provides insights into the company’s target to grow revenue 20% this year.

Doug Reid, Stifel Nicolaus: It’s all about the ecosystem, he finds, rather than device features, writing, “As device feature sets and performance factor less into consumer buying decisions, we expect the ongoing commoditization of handsets (and ultimately tablets) to further pressure mobile device pricing and gross margins. We expect leaders among.” Apple and Samsung (SSNLF) should benefit from cost advantages, Motorola from “leading edge devices and approved operating systems,” but also Microsoft (MSFT), which is rated Buy, can capture a growing share of the “smartphone value chain.” Windows Phone 7 is “positioned to emerge as a viable third mobile OS.” His observations at the congress suggest smartphone growth in Asia and Europe is set to rise faster than most people seem to be expecting. The death of Nokia’s symbian is going to spur first-time smartphone buyers, he thinks. He sees 48% smartphone unit growth this year, more than the 45% IDC has been modeling, with 55% growth in Asia.

Tom Roderick, Reid’s colleague covering infrastructure, wonders why the dramatic leap in data usage hasn’t led to an expected investment in back-end infrastructure. “we have seen very little pull-through
for our vendors in the billing, customer care, gateway/mediation, video optimization and even messaging segments. Generally speaking, the answer a year later seems to be that carriers have focused on network build-outs first, and infrastructure second.” He predicts there could still be a payoff for some back-office vendors, such as Amdocs (DOX).

Glen Yeung, Citigroup: Chipmakers in general have had a “strong presence” at the show, he writes. Intel (INTC) told folks that its “Medfield” processor applications processor for mobile devices is “expected to be in one Android phone by the second half of this year,” he notes. “Benchmarks won’t be available until closer to launch,” adds Yeung, “but Intel believes Medfield’s performance in active states will be stronger and more power efficient than ARM designs, and competitive in idle states.” Yeung thinks Marvell Technology Group (MRVL) isn’t getting enough credit for its wireless chip intentions. The company showed off a semiconductor that combines app processor with a 3G baseband processor, and that’s intended for the China cellular market. Writes Yeung, “we note investors continue to discount Marvell’s wireless growth potential, and also focus on the effect of decelerating PC growth & the rise of SSD on Marvell’s hard drive business. We believe these concerns are ameliorated by Marvell’s share gains at Hitachi and Seagate as well as strong design wins (60%) of SATA
SSD controllers. Further, we note Marvell is likely to return value to shareholders by increasing its buyback,” with $2.7 billion in cash, or $3.96 per share, observes Yeung.

No comments:

Post a Comment