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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?

We also felt that to be successful in that market, the economics necessitated that you have an extremely high market share. So, you can't be successful by being the number four or five player. You had to be either in the top two or three, or you're not going to make any money.

We reflected on that, and thought, gee, there are a lot of other things we can do with that money. You don't have to be in a bad economic business. You choose to be in the bad economic businesses.

We decided not to be in the business. But again, it was a painful decision, because we laid off quite a few people. We terminated about 2,500 people, of which 500 people found jobs elsewhere in Broadcom. But the net was about 2,000 people who left the company. Many of them were very good people. So, you never feel good about that.

On the other hand, since we've done that, we've seen the profitability of the company dramatically increase. I mean, we were losing about $2 million a day in that [baseband] now, we are able to invest more in the products you see here.

EE Times: We understand that broadband and connectivity are Broadcom's bread-and-butter, and you guys are doing a great job.

But I always thought the whole reason for Broadcom's entry into the baseband business was that you wanted to become a chip supplier for the entire smartphone system, including baseband and apps processors. Now that you're out of the baseband modem business, where will that leave you in the smartphone business in the future?

McGregor: So, if you think about the connectivity business, we won all of that business without any baseband participation. We never really had a high share in the baseband. We had a strong number one position in connectivity, and again, all without the benefit of baseband. That would have been on top of that share.

The reason we win in connectivity is because we have very strong execution across the broad range of technologies. And we are really good at integrating different connectivity technologies. We are creating a platform out of connectivity technologies. And that doesn't change.

The other thing is that there has always been an issue with time to get connectivity and baseband out because of the different cadence between the two. Baseband changes at a rate about half the rate connectivity changes. For every generation you go through with baseband, you probably go through two generations of connectivity.

If you ever put them together in the same chip, then, you will disadvantage the connectivity substantially, because it will be on average, one generation behind. So, that's problematic, certainly for high-end and in some cases mid-range chips, but less so on low-end.

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