SAN FRANCISCO -- Investors had two reasons to stick with
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
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
(TXN - Get Report)
had grabbed 35% and
In the market for portable navigation devices -- a larger market for Sirf than cell phones -- competition has also been fierce with chipmakers Broadcom and
stealing significant share from Sirf at customers like
(GRMN - Get Report)
, according to RBC Capital Markets analyst Mahesh Sanganeria.