New York: 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 the market.
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 of shortages.
“The (device makers) want choices. They want somebody to keep Qualcomm honest,” he said.
Broadcom shares were up 34 cents, or 1% at $33.73, in afternoon trading on Nasdaq, where Qualcomm shares were down $1.10 or almost 2% 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.