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Technology Stocks : Rockwell-Spins off Conexant (CNXT) -- Ignore unavailable to you. Want to Upgrade?

To: MeDroogies who wrote (1929)	4/18/2001 5:45:14 AM
From: Neil H	Read Replies (1) \| Respond to of 2013

Tuesday April 17 8:41 PM ET Conexant to Supply Motorola Broadband Unit By Timna Tanners LOS ANGELES (Reuters) - Communications chip maker Conexant Systems Inc. (NasdaqNM:CNXT - news) on Tuesday agreed to supply chips to the broadband communications unit of Motorola Inc. (NYSE:MOT - news), competing directly with the second-largest mobile phone maker's current supplier, Broadcom Corp. (NasdaqNM:BRCM - news). Conexant and Motorola declined to give financial terms or quantities involved in the multiyear agreement. Under the deal, Newport Beach, Calif.-based Conexant will supply packages of chipsets and software to Motorola's broadband communications division, primarily for use in set top boxes, cable modems and voice over Internet protocol. Motorola officials said Conexant would be a second source for the products, which have been supplied to Motorola by cross-town communications chip maker Broadcom, headquartered in Irvine, Calif. Mark Balog, director of semiconductor procurement, in an interview said a dual sourcing strategy reduced Motorola's risk. ``The infusion of competition will make an already good supplier (Broadcom) even better,'' added Keith Jones, director of supply chain management, or procurement. ``It may be a negative for Broadcom because now they have true competition in the broadband space. But I think it's a net positive because it will help keep them very focused on our business and probably accelerate their product development in the market as well,'' Jones said. Motorola and Broadcom did not specify how the Conexant agreement would affect Motorola's contractual primary source agreement with Broadcom. ``There will always be competitors who provide second source to our customers,'' said Broadcom spokesman Bill Blanning. ``But it's ultimately all about execution.'' The news of Motorola's agreement with Conexant comes the day after weak earnings news from Cisco Systems Inc. (NasdaqNM:CSCO - news), one of Broadcom's 3 major customers along with Motorola and 3Com Corp. (NasdaqNM:COMS - news). ``Has a market opportunity share been eroded for Broadcom? The answer is yes,'' said Banc of America analyst Alex Gauna. He said the near-term affect to Broadcom would be minimal, but sales results in 2002 would likely reflect a percent of the upside business opportunity lost to Conexant.