Collins Stewart says the expect shares of SIGM to be meaningfully pressured todayon news that its competitor Broadcom received Microsoft Mediaroomcertification for its latest IPTV set-top box (STB) chip.
Broadcom announced this morning that the BCM7405 STB SoC received certification for Microsoft Mediaroom. We believe Broadcom will begin production shipments of its IPTV STBs in late Q4. Initially, we expect Broadcom to receive a 30% share of STBs at major service providers. Over time, we believe this will shift closer to the 50/50 mix that service providers like AT&T U-verse currently maintain between Motorola and Cisco STBs.
Though the certification of Broadcom's SoC was anticipated, we still view this as a major negative for Sigma Designs. We expect this to precipitate significant share loss for Sigma Designs at major service providers including British Telecom and AT&T U-verse.
Action: Not much to add. Strength of overall mkt may provide nice fills for early shorts.
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I would cover SIGM here, it might break down, but it's easier to take the easy profits and look elsewhere.
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