Bloomberg News

Marvell Advances After Analyst Predicts Google TV Windfall

January 06, 2012

(Updates share price starting in first paragraph.)

Jan. 5 (Bloomberg) -- Marvell Technology Group Ltd. shares rose 7.3 percent after Nomura Securities International Inc. predicted that a new agreement to supply chips to Google TV devices may boost sales.

Marvell may get $30 million to $50 million from Google TV shipments in 2012, Romit Shah, an analyst at Nomura in New York, said today in a report. Though sales volume isn’t large yet, the platform is “worth monitoring,” he said. Marvell announced the partnership earlier in the day, saying that its Armada chip had been designed into a new generation of Google TVs, which will debut at next week’s Consumer Electronics Show in Las Vegas.

Google Inc., the world’s biggest Internet-search company, created the Google TV project in 2010 in a bid to gain a bigger foothold in consumers’ living rooms. It develops software for the effort and relies on manufacturers, such as Sony Corp., to create TVs and equipment that work with the technology.

“Marvell and Google have teamed up to change home entertainment forever -- transforming the TV into the command center for our connected lifestyle,” Weili Dai, Marvell’s co- founder, said today in a statement. “This is a major breakthrough movement.”

Marvell shares rose to $15.23 at the close in New York, bringing its 2012 advance to 10 percent. The stock had tumbled 25 percent in 2011.

Intel’s Role

Google TV is designed to make television viewing more like Web surfing, with easier ways to search for content. Marvell’s chips, which also go into mobile phones and computers, will help Google TV devices deliver audio, video and Web content that’s optimized for TV viewing. Google TV hardware has relied on Intel Corp.’s Atom chips, though the companies don’t have an exclusive agreement.

Intel, the world’s largest chipmaker, has backed away from the TV market in recent months. The company said in October that it was ending an effort to get its processors into televisions, though it will still supply chips to set-top boxes.

Apple Inc. also looks to popularize Internet television. The company sells a device called Apple TV that helps people access their digital content on a TV. Apple is developing its own television set as well, people familiar with the matter said last year.

While Internet TVs have yet to generate “real volumes,” they could eventually threaten traditional television, Shah said in his report. He has a “neutral” rating on Marvell shares.

“As more streaming content shifts to the Internet, Google TV and Apple TV have the potential to cannibalize traditional set-top boxes in our homes,” Shah said.

--With assistance by Ian King in San Francisco. Editors: John Lear, Nick Turner

To contact the reporter on this story: Nick Turner in San Francisco at nturner7@bloomberg.net

To contact the editor responsible for this story: Tom Giles at tgiles5@bloomberg.net


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