The growing market for mobile devices is proving to be beneficial for the smartphone ecosystem component makers like ARM and Marvell (NASDAQ:MRVL) that specialize in chips optimized for longer battery power. We covered ARM last week, and in this post we will look at Marvell and Infineon (OTC: IFNNY.PK).
Gartner recently raised its worldwide PC shipment forecast for this year to 20% growth, partly driven by growth in shipments of mobile devices like laptops and netbooks. In 2009, mobile PCs accounted for about 55% of global PC shipments and could reach 70% of shipments by 2012. Apple’s iPad has created much interest in tablet devices: Gartner estimates that vendors could ship up to 10.5 million traditional tablets and next-generation tablet devices worldwide in 2010.
Last month at the Mobile World Congress (MWC), Marvell launched ARMADA 618, its flagship chip for the ARMADA family of applications. The ARMADA 618 application processor features a 1-gigahertz CPU, 1080p full-HD video, 3D graphics, the industry’s fastest LP-DDR, and optimized power for longer battery life. It targets not just high-end smartphones but also other mobile devices like mini-notebooks, e-readers, and tablets. With this chip, it will compete directly with Qualcomm’s Snapdragon, Nvidia’s Tegra, and TI’s OMAP.
At the MWC, Marvell also unveiled its new Pantheon chipset that combines wireless, HD video capabilities, and other applications. This chip targets low-cost smart phones priced at around $99. As handset makers are trying to put more features into low-cost smartphones, chipmakers are coming up with integrated chips that combine multiple features and bring down the component price. Broadcom also revealed a new integrated chip that combines 3G wireless, graphics, and an applications processor capable of running Android software or Microsoft Windows Mobile. It will be interesting to see who lands up with the maximum design wins in the upcoming slew of tablets.
Marvell last week reported fiscal 2010 annual revenue of $2.81 billion, down 5%. Net income improved to $353 million, or $0.54 per share from $147 million, or $0.23 per share last year. Cash, cash equivalents, and short-term investments were $1.8 billion at the end of the year.
The company’s fourth quarter results topped estimates. Q4 revenue grew 64% y-o-y and 5% q-o-q to $843 million. It swung to net income of $205 million, or $0.31 per share, from a loss of $65 million, or $0.11 per share last year. Gross margin was 59.7% versus 50.7% last year and 57.5% last quarter. Q3 coverage is available here.
For the first quarter, Marvell expects revenue of $825 million to $860 million. It expects mobile and wireless revenue to grow modestly on a sequential basis and the network business to decline slightly. The stock is currently trading around $20 with a market cap of about $12 billion; the 52-week range is $7.41-$21.76.
On the other hand, Infineon, with annual revenue of €3.02 billion ($43.45 billion), is targeting the dual-SIM market, which Strategy Analytics expects to double in size from 2009 to 2010. A dual-SIM mobile phone is one which holds two SIM cards and can be switched from one to the other as required. There is a high growth rate for this market in Asia Pacific countries and the BRIC (Brazil, Russia, India, and China) group. To target these markets, last month Infineon launched its new XMM™2138 platform.
Infineon in its first quarter results reported revenue growth of 27% y-o-y and 10% q-o-q to €941 million ($1.28 billion). Net income improved to €66 million ($89.8 million) from €14 million ($19.05 million) last quarter. Q4 coverage is available here.
Based on its strong performance, Infineon raised its outlook for fiscal 2010 to more than 20% growth in revenue. For the second quarter of the 2010 fiscal year, Infineon expects revenues to be approximately the same to slightly down sequentially due to seasonality. The stock is currently trading around $5.7 after hitting a 52-week high of $6.15 on January 5.