| 2017-02-17 11:10:54|
AAPL, AVGO… 11:10 02/17 02/17/17
Broadcom seen powering Apple iPhone wireless charging
In a research note this morning, JPMorgan analyst Harlan Sur told investors he believes that when Apple (AAPL) decides to embed wireless charging capability in the iPhone, it will be a Broadcom (AVGO) based solution. Further, the analyst expects this wireless charging design win to add $500M-$600M in annualized revenue for Broadcom. BROADCOM TO PROVIDE WIRELESS CHARGING: JPMorgan's Sur noted that his research efforts and industry news indicate that Broadcom, working with Apple, has developed a chip solution that will be used to power the wireless charging functionality on the iPhone platform. The analyst said that while it is unclear whether Apple will add the wireless charging capability on the iPhone 8, especially after what happened with the Samsung (SSNLF) Note 7, he is confident that when the tech giant decides to embed the capability in its smartphone, it will be a Broadcom based solution. Furthermore, Sur noted that both companies have had a close partnership in co-developing custom chips for many years, with Broadcom supplying the touch controller ASIC chipsets for current and prior generations of iPhones, iPads, MacBook Air and MacBook Pro platforms. Broadcom's wireless charging design win could add $500M-$600M in annualized revenue for the company, he contended. The analyst also added that he believes the likely win at Apple is just another facet of the diversified growth trends that Broadcom is driving in its wireless, datacenter, and storage businesses and continues to believe the market underestimates the company's diverse revenue growth drivers over the next several years. He reiterated an Outperform rating on Broadcom's shares, contending that the company's technology leadership and diverse product cycles should power "strong profitability growth" and free cash flow generation. TECHNOLOGY CAPABILITY IN-HOUSE: JPMorgan's Sur also told investors that he believes Broadcom has had wireless charging capability in-house for over four years and supports all wireless charging standards. While he noted that the Broadcom analog team introduced its wireless charging capability in 2014, the analyst thinks they were developing it in-house starting in 2013. Moreover, Sur pointed out that the Broadcom/Apple partnership on wireless charging may have started about two years ago, with Broadcom's established analog design team helping Apple develop the analog/mixed signal touch controller solution. OTHERS TO WATCH: Energous (WATT) is another name often speculated as a benefactor from the growth of wireless charging. The DA4100 RF-Transmit integrated circuit recently launched by Energous (WATT) and Dialog Semiconductor (DLGNF) is now sampling to customers and "could help Apple incorporate over-the-air power in a future iPhone or iPad," speculated Apple Insider's Malcolm Owen in report published on February 2. Energous has been developing a technology called WattUp to enable radio frequency wire-free charging for electronic devices. PRICE ACTION: In morning trading, shares of Broadcom have gained almost 1% to $209.71, while shares of small-cap Energous have slid 9% to $15.28.
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