That's courtesy of analyst Shaw Wu of American Technology Research this morning. His main concern is the cost of Broadcom's mobile-phone initiative. He writes:
"BRCM is a relatively new player in the space and we underestimated (we believe BRCM did as well) the costs associated with entering this highly competitive business."
Broadcom might have to "price aggressively to beat out incumbents," he adds. On top of that, Wu doesn't see any serious pickup in Broadcom's core markets such as networking and Bluetooth:
"The combination of lower revenue and higher expenses is not a pretty sight. As a result, we are reducing our estimates significantly. For 2008, we are now modeling $4.26 billion in revenue and $1.20 in EPS (down from $4.3 billion and $1.60)."
Wu is not alone; Broadcom stock is down 17 percent this morning.
Now it's off to the TelcoTV exhibit floor, to meet with Packet Vision Ltd. There's a story to be had in the ad-insertion work they're doing.
— Craig Matsumoto, West Coast Editor, Light Reading