Broadcom at Morgan Stanley Semiconductor and Systems Conference - Final.

Original Source: FD (FAIR DISCLOSURE) WIRE

UNIDENTIFIED SPEAKER: Okay, let's get started. Thank you much for joining us here again. From the first days that I met Broadcom back in the mid-1990s I was clear this was a very special company in terms of their strategy and ability to execute in technology. And today they obviously are an extremely well positioned company, targeting a lot of very important end markets. And they tend to take a leadership position in all of those.

So two people I want to introduce from the Company. First, on my far left is Peter Andrew, who many of you know. Peter, a former competitor in the marketplace and has had a great transition I think in really understanding the key issues of Broadcom.

And then I'm very pleased to have Bob Rango from the Company, who is running their mobile and wireless group. Bob's background -- spent most of his career at Agere or Lucent before coming to Broadcom I guess two or three years ago, and is running the mobile and wireless group.

So I'm going to ask Bob just to first start off, just kind of frame the Company broadly. And most of what we will discuss here, at least at his level, will be are the wireless side where there's a lot of activity and certainly a lot of growth opportunity. So Bob, why don't you kick it off with kind of just how you see the whole company, laying out maybe the high level, and then we will drill down into wireless?

BOB RANGO, GROUP PRESIDENT, MOBILE & WIRELESS, BROADCOM: Okay, Broadcom did 540 million in the fourth quarter, and the mobile and wireless piece is about 23 percent of that revenue. And Broadcom at a higher level is made up of four business groups. Mobile and wireless is one of the four. The broadband business, which is run by Dan Marotta, I believe is about 33 percent of our Broadcom. And that includes our set-top box business, our DSL and cable modem business. Then there's the network infrastructure business, which is run by Ford Tamer. That is where most of our switching technology and Ethernet physical layer technology come out of, as well as security and SiByte processors. And then the fourth business is the enterprise computing business unit, which includes ServerWorks, as well as our Ethernet mix business.

So focusing now on mobile and wireless, there's five businesses in mobile and wireless, and each one of them has I think a very good opportunity in the marketplace. Let me just start with BlueTooth, mainly because yesterday we bought a company called Zeevo for $32 million, which I think rounds out our portfolio in the BlueTooth area. And for those of you who have been following BlueTooth over the years, you know it's a long time coming, but BlueTooth is finally taking off. I have been using the analogy that the value proposition of BlueTooth has now come up and the price point has come down, and that they're now in equilibrium. And BlueTooth is being adopted by lots of different platforms.

The big driver of course is cell phones. And that's where Broadcom supplies companies like Motorola with their BlueTooth needs. And recently at 3GSM, Samsung announced a number of 3G phones. Those are all powered also by Broadcom BlueTooth.

So yesterday the Zeevo acquisition rounded out our portfolio. It gives us the ability to go after cell phones, PCs. The Widcomm acquisition last year really enabled us to go after BlueTooth and PCs, but the Zeevo acquisition allows us to go after headsets, both the mono and stereo wireless headsets. And a number of the tier one cell phone companies are talking about bundling these cordless headsets in with their cell phones going forward. So I think a very good acquisition for us. it's a team of about 48 people or so -- 48 to 50 people. They're a working team right here -- well, in San Jose, close to the Broadcom core engineering team. So that rounds out our BlueTooth portfolio.

And then BlueTooth, I really do think that Broadcom has come a long way. We're gaining market share very rapidly. It will be one of the fastest growth businesses in my area for 2005.

So moving on to the next one of those five, wireless LAN, Broadcom is number one in wireless LAN. We have 33 percent worldwide market share; nobody else comes close. We play in the retail space. We play in the embedded space at places like HP Printer. 100 percent of the HP Printer business, for example, that has wireless LAN is Broadcom. Of course you guys probably have heard all the other design wins at places like Linksys, Apple. They use Broadcom for a predominant amount of their needs for wireless LAN.

It's a big opportunity in 2005 in wireless LAN in MIMO, and Broadcom plans to address that vigorously for the second half 2005 where hopefully the standards on 11n will be a little more focused than they currently are now. In the meantime there will be a lot more g product certainly over the first half of this year.

I did a survey this weekend of all of the ads in the LA Times and the Orange County Register, and I would say that Broadcom powers at least 65 percent of everything that's been advertised in either Best Buy, Circuit City, Fries, CompUSA, all the wireless LAN stuff that's in there. I counted it -- it was about 60 percent or more was powered by Broadcom wireless LAN.

Moving on to the third piece of my business, just as a quick intro it's cellular base band. For those of you who followed Broadcom, you know we bought a company called Mobilink about three years ago. They were focused on the China market where they had companies like Bird and Conca (ph) and Panda as their lead customers. And my job has been to convert that from a China focus too a Tier 1 cell phone manufacturer focus.

Along the path we bought a company called Zyray last year which provides us with a 3G capability. And I am very happy with this acquisition. We are on track with our 3G offering. I talked about that at the analyst conference, the Broadcom analyst conference. We are on schedule. I know everybody is anxious to hear about Tier 1 design wins, but I think that's going to …