Chip supplier to RIM sees fall in revenue due to company’s new strategy.
Marvell, popular makers of networking chips, registered a 6% fall in revenue (to $901 million) in the quarter that ended on Jan 29, with net income down as well to 13% ($223). The company’s shares also saw a drop of more than 11%.
According to Marketwatch, CEO Sehat Sutardja blamed the drastic downturn in revenue to one of it’s customers’ new strategy towards building low cost, low margin smartphones – a market that Marvel does not cater to. That customer is widely rumored to be RIM.
The Blackberry 8250 had remained the go-to device for anyone wanting a cheap, reliable smartphone that worked out of the box. However, Google’s Android operating system has been chipping away at the low-cost market since last year, offering hundreds of devices at even lower prices than the 8250. So an entry-level smartphone from RIM seems like a viable plan to regain some of the market, considering the band value it still commands in many markets.
RIM may also be looking to capitalize on the now vulnerable gap left by Nokia when they decided to partner up with Microsoft to produce Windows Phone 7 devices. Nokia has yet to announced any new products from the partnership, let alone an entry-level model.
RIM has made no official statement yet.