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Broadcom moves past LTE, 5G cellular to refocus in broadband

Posted: 13 Jan 2015 ?? ?Print Version ?Bookmark and Share

Keywords:Broadcom? LTE? 5G cellular? broadband? Qualcomm?

During the recent CES, Broadcom CEO Scott McGregor detailed how his company decided to drop its smartphone modem business, which presently is dominated by Qualcomm. However, according to him, that market now being targeted by a number of "must-win-at-all-cost" chip companies in Asia.

Noting that his company was losing about $2 million a day in the modem business, McGregor, who looked almost relieved, proudly pointed to the Broadcom booth and bragged, "We have no cell phones." The company's focus is now on the broadband and connectivity businesses. "Our broadband is an extremely strong and valuable business. Our connectivity business is also very strong, and is focused more on the Internet of Things now," he said. "Frankly, these are better businesses to be in and invest in."

Broadcom CEO Scott McGregor

The company is broadening its technology and businesses. These include connected homes, and more recently, automotive. McGregor called the automotive segment "a great business we are sort of tiptoeing into" and finding it "very interesting."

EE Times caught up with McGregor last week during CES and asked him how the company's decision to not participate in the baseband business is likely to affect Broadcom in the future. Here's an excerpt of our conversation.

EE Times: Broadcom got out of the baseband modem business. Could you explain how you reached the decision?

McGregor: It was a very painful decision. The reason for doing that was a couple of fold. One was that we saw the deteriorating condition in the economics of that business in terms of pricing and margins. There were a number of players in the space who didn't care whether they made money or not. And they had imperatives to be in that business at all costs. It's a little different from how we run Broadcom as a for-profit company.

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