NEW YORK – After warnings last week of falling quarterly sales stemming from weak PC demand, Marvell Technology Group sought to change perceptions about the company’s prospects that one analyst called “less than inspiring.”
Countering several financial analysts who have downgraded Marvell, co-founder Weili Dai stressed in an interview that Marvell is ready for the coming “super-integration era” of storage (controllers for solid state drives), connectivity, video, 3-D graphics and modem technologies for Ultrabooks, tablets, smartphones and smart TVs. According to Dai, not even rival Broadcom has the “ingredients” necessary for broad range of future smart devices.
Dai stopped short of providing specifics as to when she expects the so-called “super-integration” era to start contributing to Marvell’s bottom line.
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Sticking mostly to company talking points, Dai (right) cautioned against betting against Marvell – especially the company’s staying power. “We don’t live by quarters. We are here to stay [for the] long term.”
She noted that Marvell has rebounded several times in the past, proving naysayers wrong. Among the examples: Marvell’s entry into the cut-throat HDD controller business 17 years ago; its decision to buy Intel’s XScale processor division in 2006; and development of its own TD-SCDMA modem chip.
Marvell also stresses its leading position in SSD controllers which will become an important ingredient in a range of products beyond Ultrabooks. The company is hoping other key elements including connectivity, multicore CPUs, modem, graphics and video will also play a critical role in smart devices, including smart TVs, smartphones and tablets.
Marvell - RIM connection
The key issue for financial analysts is that Marvell seems unable to find the right customers.
Gary Mobley of Benchmark Co. called Marvell’s quarterly results and underlying guidance “less than inspiring.” “Some large diversified chip companies such as Broadcom seem to have an uncanny ability to find the right growth end markets (e.g. comm ICs) and the right customers (e.g. Apple)," he said in a research note. "Marvell, on the other hand, continues to struggle with too much exposure to no-growth markets (e.g. HDDs; 47 percent of revenue) and has suffered along with struggling customers (e.g. RIM). We reiterate our Hold rating.”
Indeed, Marvell owes its initial success in mobile phones to design wins in RIM’s Blackberry. As RIM tanked in the smartphone market, so have Marvell's fortunes. Asked about company plans to make up for losses associated with RIM in the global market, Dai stood by her customer, noting, “You should know that I go to the war for my customers. RIM is going through some tough times. Sure, as a part of the ecosystem, we are affected. But I am confident that RIM will be leading the pack with its enterprise software capability.”
Marvell is meanwhile betting big on its multimode, multifrequency band TD-LTE modem chip set for TD-SCDMA and LTE markets. The TD-LTE modem must operate on TD-SCDMA and GSM in the China Mobile network, while offering a roaming capability on 4G and FDD. Marvell’s PXA1802, announced last February is designed to meet those requirements. “This will become a foundation for our global leadership,” claimed Dai.