Is Marvell Technology Group Ltd. (MRVL)’s New Chip for the Masses Enough?

Should investors marvel at Marvell?
Marvell is moving in the right direction with powerful chips for low-cost mobile devices, but will face intense competition from Qualcomm and NVIDIA. The latest chip isn’t a good reason to jump into the boat with Marvell, but current investors should be glad to see the company pursuing additional low-cost market penetration. The chips will be available in the first half of this year, so investors shouldn’t have to wait long to see if carriers and handset makers start ordering the new chip.

Back in December, Marvell’s stock slipped temporarily on news that it infringed upon several Carnegie Mellon University hard disk patents, which cost the company at least $1.17 billion in fines and possibly more. Although this lowered the stock price for just a few weeks, some worry the price could drop again if more penalties are levied. But Marvell is well integrated into the Chinese smartphone market, which is the largest in the world. Investors should consider its partnerships with companies such as Samsung and China Mobile as a sign that it can compete in the highly competitive mobile space and win big contracts.

Fool contributor Chris Neiger has no position in any stocks mentioned. The Motley Fool recommends Apple and NVIDIA. It owns shares of Apple, China Mobile, and Qualcomm.

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