Broadcom Corporation Wins the LG G3

Allaying fears that rivals could take high-end connectivity combo chip share, Broadcom has won the LG G3's connectivity socket.

May 28, 2014 at 10:00AM

The high-end "hero" smartphones that matter these days come from Apple, Samsung, LG, and HTC. While this smartphone market has seen growth slow considerably over the last several years as cheaper phones add functionality and performance, the high end is still crucial to both handset vendors and component suppliers. Broadcom (NASDAQ:BRCM), which supplies connectivity chips into handsets, appears to be holding its high-end connectivity share position quite well.

Broadcom wins another high-end score
The Samsung Galaxy S5, iPhone 5s, HTC One (M8), and now the LG G3 all sport high-end Broadcom connectivity solutions. This is a particularly noteworthy validation of the strength of Broadcom's connectivity solutions given that Qualcomm (NASDAQ:QCOM)

The good news is that Broadcom's position at the high end of the connectivity combo chip space is probably secure. Not only do the vendors of "hero" devices prefer the flexibility of a discrete component (Qualcomm offers parts with integrated Wi-Fi), but they are also concerned with both power consumption and performance. Broadcom claims to have a significant performance and power advantage with its connectivity solutions, and given that the company keeps winning the high end, there's little reason to doubt that assertion.

Broadcom's connectivity business seems viable even without cellular
Most of Broadcom's mobile and wireless revenue comes from the sale of connectivity products. However, the profitability of this division has been hit dramatically (last quarter, Broadcom's mobile business posted a loss) as a result of the company's attempt to move into cellular modems/apps processors. This move is intended not just as an offensive play -- to grow sales and profits meaningfully -- but as a defensive strategy to protect the company's connectivity share at the low and midrange.

In the high-end space, the handset players pick and choose the components that go into their designs, but in the midrange and value space, the vendors want the complete platform. Without a credible modem/apps processor story, Broadcom has a difficult time competing for connectivity share in lower-end phones. However, given the trends currently in place, and Broadcom's strength at the high end, the company's "problem" is seemingly a lower rate of growth if it doesn't get into cellular rather than a collapse of its mobile and wireless business.

Foolish takeaway
With this round of high-end phones all being powered by Broadcom connectivity, it looks clear that even without a cellular story, the company's connectivity business will be viable. Would it be nice for Broadcom to increase its content share in handsets and drive substantial revenue growth from there? Of course. However, is this a "sink or swim" proposition in which Broadcom face a long-term risk if it doesn't win its connectivity share in cellular? Probably not. 

Leaked: Apple's next smart device (warning, it may shock you)
Apple recent recruited a secret-development Dream Team to guarantee their newest smart device was kept hidden from the public for as long as possible. But the secret is out...and some early viewers are even claiming its everyday impact could trump the iPod, iPhone, AND the iPad. In fact, ABI Research predicts 485 million of these type of devices will be sold per year. But one small company makes this gadget possible. And their stock price has nearly unlimited room to run for early in-the-know investors. To be one of them, and see Apple's newest smart gizmo, just click here!

Ashraf Eassa has no position in any stocks mentioned. The Motley Fool recommends Apple. The Motley Fool owns shares of Apple and Qualcomm. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

Money to your ears - A great FREE investing resource for you

The best way to get your regular dose of market and money insights is our suite of free podcasts ... what we like to think of as “binge-worthy finance.”

Feb 1, 2016 at 5:03PM

Whether we're in the midst of earnings season or riding out the market's lulls, you want to know the best strategies for your money.

And you'll want to go beyond the hype of screaming TV personalities, fear-mongering ads, and "analysis" from people who might have your email address ... but no track record of success.

In short, you want a voice of reason you can count on.

A 2015 Business Insider article titled, "11 websites to bookmark if you want to get rich," rated The Motley Fool as the #1 place online to get smarter about investing.

And one of the easiest, most enjoyable, most valuable ways to get your regular dose of market and money insights is our suite of free podcasts ... what we like to think of as "binge-worthy finance."

Whether you make it part of your daily commute or you save up and listen to a handful of episodes for your 50-mile bike rides or long soaks in a bubble bath (or both!), the podcasts make sense of your money.

And unlike so many who want to make the subjects of personal finance and investing complicated and scary, our podcasts are clear, insightful, and (yes, it's true) fun.

Our free suite of podcasts

Motley Fool Money features a team of our analysts discussing the week's top business and investing stories, interviews, and an inside look at the stocks on our radar. The show is also heard weekly on dozens of radio stations across the country.

The hosts of Motley Fool Answers challenge the conventional wisdom on life's biggest financial issues to reveal what you really need to know to make smart money moves.

David Gardner, co-founder of The Motley Fool, is among the most respected and trusted sources on investing. And he's the host of Rule Breaker Investing, in which he shares his insights into today's most innovative and disruptive companies ... and how to profit from them.

Market Foolery is our daily look at stocks in the news, as well as the top business and investing stories.

And Industry Focus offers a deeper dive into a specific industry and the stories making headlines. Healthcare, technology, energy, consumer goods, and other industries take turns in the spotlight.

They're all informative, entertaining, and eminently listenable. Rule Breaker Investing and Answers are timeless, so it's worth going back to and listening from the very start; the other three are focused more on today's events, so listen to the most recent first.

All are available for free at

If you're looking for a friendly voice ... with great advice on how to make the most of your money ... from a business with a lengthy track record of success ... in clear, compelling language ... I encourage you to give a listen to our free podcasts.

Head to, give them a spin, and you can subscribe there (at iTunes, Stitcher, or our other partners) if you want to receive them regularly.

It's money to your ears.


Compare Brokers