Light Reading

Sigma Sinks on Broadcom Scare

Craig Matsumoto
LR Cable News Analysis
Craig Matsumoto

Shares of Sigma Designs Inc. (Nasdaq: SIGM) are down 20 percent midday on word that Broadcom Corp. (Nasdaq: BRCM) may have won a key IPTV deal with Motorola Inc. (NYSE: MOT).

Motorola, which accounted for 23 percent of Sigma's revenues in the fiscal year ending Feb. 2, is building prototype second-generation IPTV set-tops that use a Broadcom processor, Robert W. Baird & Co. Inc. analyst Tristan Gerra wrote in a research note this morning.

Sigma shares were down $4.26 (20.2%) at $16.77 in early afternoon trading.

The reaction might seem extreme, but some investors have been poised for any news that Broadcom or STMicroelectronics NV (NYSE: STM) might be ready to break Sigma's near-monopoly in IPTV set-top boxes. Sigma's chip has been the only processor certified for the Mediaroom, the Microsoft IPTV platform. Just yesterday, it put out an updated version, also tailored toward Mediaroom. (See Sigma Enters IPTV Round 2.)

Even a hint of Broadcom working with Microsoft was enough to drag Sigma's stock down recently. (See Sigma's Luck Goes Omega and Sigma Bounces Back.)

But Sigma isn't convinced that Motorola has made any decisions on its next generation of boxes, considering Broadcom's relatively recent entry into the market. "Decisions like that are not usually made in that way," says Ken Lowe, Sigma vice president of business development.

Even if Motorola has decided it likes Broadcom, Sigma probably wouldn't lose all its business there. "The type of position somebody like Motorola would take is that they want to offer as many options as they can," Lowe says. "As far as I'm concerned, we're in very good position with our next-generation product."

Investors do sense something's at stake, though. Broadcom's supposed arrival could affect Sigma's business with carriers, including AT&T Inc. (NYSE: T), BT Group plc (NYSE: BT; London: BTA), and KDDI Corp. , Gerra writes. But the ramifications wouldn't hit until next year.

The companies involved weren't immediately available for comment.

— Craig Matsumoto, West Coast Editor, Light Reading

(2)  | 
Comment  | 
Print  | 
Newest First  |  Oldest First  |  Threaded View        ADD A COMMENT
Pete Baldwin
Pete Baldwin,
User Rank: Light Beer
12/5/2012 | 3:43:24 PM
re: Sigma Sinks on Broadcom Scare
Actually, they had no comment, but a spokesman did review the chip situation for me. Broadcom has indeed completed Mediaroom certification.

As for ST's certification status or lack thereof, Microsoft has no comment. ST is "still a strategic partner of ours, but the two chipsets that are part of the Microsoft Mediaroom ecosystem are Broadcom and Sigma," the spokesman says.
Pete Baldwin
Pete Baldwin,
User Rank: Light Beer
12/5/2012 | 3:43:24 PM
re: Sigma Sinks on Broadcom Scare
I should mention -- Sigma's future isn't predicated on just IPTV; it also sells chips into DVD players. Gerra is forecasting some weakness there, too.

Gut feeling is that it's the IPTV side that's really moving the stock, though.
From The Founder
The comms industry is rallying to the cause of open, independent interoperability testing.
Flash Poll
Live Streaming Video
CLOUD / MANAGED SERVICES: Prepping Ethernet for the Cloud
Moderator: Ray LeMaistre Panelists: Jeremy Bye, Leonard Sheahan
LRTV Interviews
AT&T's Chiosi on the Potential of Open Source

10|6|15   |   06:27   |   (0) comments

AT&T Distinguished Network Architect Margaret T. Chiosi talks to Light Reading's Carol Wilson about the potential for open source technology to liberate communications service providers.
LRTV Interviews
Network Security in a Gigabit World

10|6|15   |   05:52   |   (0) comments

Masergy's James Harrison talks about some of the network security and data center issues network operators need to consider as they expand their broadband services portfolios.
LRTV Documentaries
Telefónica: In Search of Virtual Simplicity

10|5|15   |   07:30   |   (0) comments

Francisco-Javier Ramon Salguero, head of Telefónica's NFV initiative, admits virtualization initially means greater complexity, but with the right abstraction layer, it is possible to create a services-driven network architecture. He explains how Telefónica's current trials and initiatives are aimed at doing that, and what his company and other carriers need to ...
LRTV Interviews
Gigabit Europe Takeaways

10|5|15   |   03:47   |   (0) comments

Participants from the inaugural Gigabit Europe event in Munich share their key takeaways from the conference.
Women in Comms Introduction Videos
Intel Urges Women to Take Advantage of Their Seat at the Table

10|5|15   |   4:27   |   (1) comment

Have inclusive and constructive conversations, attach a bigger meaning to your work and get involved in the cause, Intel's Monique Hayward advises women in comms.
LRTV Interviews
BT Updates on Plans

10|2|15   |   03:16   |   (2) comments

Peter Bell, CIO at Openreach, the access network division at UK incumbent BT, provides an update on the operator's trials and how Openreach is planning to deploy the broadband technology in its street cabinets.
Telecom Innovators Video Showcase
Sonus Shakes Up SD-WAN

10|2|15   |   7:22   |   (0) comments

Sonus CTO Kevin Riley sat down with Light Reading to discuss the trajectory of the company, its SDN ambitions and why Sonus is taking a market-disruptive approve to SD-WAN.
LRTV Interviews
CityFibre's Gigabit Vision

10|1|15   |   03:18   |   (1) comment

Mark Collins, director of Strategy & Public Affairs at competitive UK city network operator CityFibre, talks about his company's plans to help build Gigabit Cities.
Telecom Innovators Video Showcase
Automate, Scale & Create With Juniper's vCPE Solution

10|1|15   |   6:34   |   (0) comments

Join Kireeti Kompella, Juniper Networks CTO, and Steve Saunders, Light Reading Founder and CEO, as they discuss Juniper Networks' approach to NFV showcased with a turnkey vCPE solution, which demonstrates how service providers can use automation to rapidly deploy services.
LRTV Interviews
Gigabit Europe: Day 1 Takeaways

9|29|15   |   05:47   |   (5) comments

Light Reading's Ray Le Maistre and Iain Morris sup a beer and discuss some of the key takeaways from the first day of Gigabit Europe 2015.
LRTV Interviews
Gigabit in Europe

9|29|15   |   04:24   |   (0) comments

At the Gigabit Europe 2015 event in Munich, Heavy Reading's Graham Finnie talks about the availability of gigabit broadband in Europe.
Women in Comms Introduction Videos
AT&T's Band of Women

9|28|15   |   4:36   |   (0) comments

Brooks McCorcle, the president of AT&T's partner solutions divisions and a mathematician by trade, shares stats on AT&T's diversity and advice on how to create your own band of women at work.
Upcoming Live Events
October 14-15, 2015, New Orleans Ernest N. Morial Convention Center, New Orleans, LA
November 5, 2015, Hilton Santa Clara, Santa Clara, CA
November 17, 2015, Santa Clara, California
December 1, 2015, The Westin Times Square, New York City
December 2, 2015, The Westin Times Square, New York City
All Upcoming Live Events
Communication service providers realize that an ICT transformation is critical to their long-term survival, but most haven't yet committed to making it happen.
Hot Topics
Verizon's Go90 Is Live – Will Anyone Watch?
Mari Silbey, Senior Editor, Cable/Video, 10/1/2015
Eurobites: Dunroamin'
Paul Rainford, Assistant Editor, Europe, 10/2/2015
Cisco's Chambers Rules Out Political Bid
Mitch Wagner, West Coast Bureau Chief, Light Reading, 10/6/2015
McKinsey: Women Less Likely to Advance at Work
Sarah Thomas, Editorial Operations Director, 10/1/2015
Sprint to Cut Up to $2.5B in 6 Months
Sarah Thomas, Editorial Operations Director, 10/2/2015
Like Us on Facebook
Twitter Feed
Webinar Archive
BETWEEN THE CEOs - Executive Interviews
With so many new and exciting communications technologies now under development, it's easy to get caught up in the industry's escalating hype cycle. That's why the ...
Last week saw a big day in the 15-year history of Light Reading when Editor-in-Chief Ray Le Maistre and I were invited to interview the Deputy Chairman and Rotating ...
Cats with Phones
Hold My Calls, Indefinitely Click Here