Marvell Technology Group (NAS: MRVL) usually underscored a skeleton to dominate ultra-fast networking chips. It usually didn’t occur accurately a approach we competence have expected.
The chip engineer has been operative with EZchip (NAS: EZCH) for years to rise and marketplace high-speed networking processors. Indeed, a dual companies usually announced their intentions to furnish a next-generation resolution that’s twice as quick as a stream state of a art. The energetic twin is quite friendly with networking hulk Cisco Systems (NAS: CSCO) , and EZchip expects a EZchip-Cisco-Marvell partnership to expostulate sales expansion for years to come.
But that wasn’t Marvell’s biggest networking news on Wednesday. Instead, a association pronounced that it has acquired Swedish high-speed networker Xelerated for an undisclosed sum.
Xelerated is one of usually dual arch competitors in EZchip’s books, a other one being Broadcom (NAS: BRCM) by a merger of Sandburst 6 years ago.
This merger expands Marvell’s networking portfolio extremely — and creates EZchip investors nervous. Marvell promises to continue operative with EZchip on a stream and just-announced networking chips and “is committed to a prolonged tenure attribute with EZchip.”
The Xelerated understanding indeed sealed final week — maybe a avowal was behind to line adult with a relaxing next-generation-chip announcement. If so, a tactic didn’t work all that good — EZchip shares fell as most as 3.3% on a flattering prosaic marketplace day. Marvell itself frequency changed on a news, though Broadcom went down by scarcely a full percent.
With Xelerated and EZchip both depending on Marvell, Broadcom is now a usually other equine in a two-pony race. This comes usually as super-fast network backbones are apropos some-more critical than ever — mobile computing and digital video are usually dual of a many bandwidth-hungry drivers of thespian expansion in this space.
Marvell is creation a intelligent pierce here. You’d be equally intelligent to follow this storyline with a penetrating eye, since there’s genuine income to be done here. The Fool is here to help: add Marvell, Broadcom, and EZchip to your Foolish watchlist in a singular click.
At a time this
article was published Fool contributor Anders Bylund holds no position in any of a companies mentioned. The Motley Fool owns shares of Marvell and Cisco and has also combined a longhorn call widespread position on Cisco. Motley Fool newsletter services have endorsed shopping shares of Cisco. Try any of a Foolish newsletter services free for 30 days. We Fools don’t all reason a same opinion, though we all trust that deliberation a different operation of insights creates us improved investors. Check out Anders’ land and bio, or follow him on Twitter and Google+. We have a disclosure policy.
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Article source: http://www.dailyfinance.com/2012/01/04/this-3-horse-race-just-lost-a-pony/
