This Day On The Street
Continue to site right-arrow
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here

Sirf Tech Digs Its Own Grave

SAN FRANCISCO -- Investors had two reasons to stick with Sirf Technology (SIRF) as the chipmaker floundered: a takeover or a turnaround.

Both of those hopes evaporated with last week's legal ruling against Sirf.

The preliminary finding by a U.S. International Trade Commission judge that Sirf is infringing on six of Broadcom's (BRCM - Get Report) patents represents more than the latest in a string of bad news for Sirf -- it marks the end of any reason to care about a company that once seemed poised to be a central player in a new world of iPhone-like gadgets.

Shares of Sirf plunged 24% to $2.44 Monday as news of the ITC ruling spread.

Sirf developed -- and once ruled -- the market for GPS chips that communicate with overhead satellites to provide an electronic device with its precise geographic location.

But a rush of competitors has eroded the price of Sirf's GPS chips and its market share.

According to iSuppli, an industry research firm, Sirf had more than a 90% share of the market for GPS chips in cell phones in 2006. In the first quarter of 2008, Sirf's share had dwindled to 36%, while Texas Instruments (TXN - Get Report) had grabbed 35% and Infineon (IFX) had 21%.

In the market for portable navigation devices -- a larger market for Sirf than cell phones -- competition has also been fierce with chipmakers Broadcom and ST Microelectronics (STM)stealing significant share from Sirf at customers like Garmin (GRMN - Get Report) and TomTom, according to RBC Capital Markets analyst Mahesh Sanganeria.

1 of 3

Check Out Our Best Services for Investors

Action Alerts PLUS

Portfolio Manager Jim Cramer and Director of Research Jack Mohr reveal their investment tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
Quant Ratings

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
Stocks Under $10

David Peltier uncovers low dollar stocks with serious upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
14-Days Free
Only $9.95
14-Days Free
To begin commenting right away, you can log in below using your Disqus, Facebook, Twitter, OpenID or Yahoo login credentials. Alternatively, you can post a comment as a "guest" just by entering an email address. Your use of the commenting tool is subject to multiple terms of service/use and privacy policies - see here for more details.
Submit an article to us!
BRCM $42.59 -1.63%
GRMN $47.07 -0.95%
TXN $56.54 -1.14%
YHOO $44.13 -0.69%
AAPL $124.25 -0.14%


DOW 17,698.18 -77.94 -0.44%
S&P 500 2,059.69 -8.20 -0.40%
NASDAQ 4,880.2280 -20.6570 -0.42%

Partners Compare Online Brokers

Free Reports

Top Rated Stocks Top Rated Funds Top Rated ETFs