According to The Economic Times, Broadcom bough the unit of the Indian company for an undisclosed sum. The purchase could help Broadcom compete against Qualcomm (QCOM) and other chipmakers in its Wi-Fi/Bluetooth/GPS combo chip business in the low-end and mid-range smartphone market.
Broadcom still controls most of the high-end smartphone markets tanks to deals with Apple (AAPL) and Samsung.
The chipmakers announcement that it will exit the baseband market may also be contributing to Friday's gains. Share of Broadcom are up 19% on the week since the announcement.
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TheStreet Ratings team rates BROADCOM CORP as a Hold with a ratings score of C+. TheStreet Ratings Team has this to say about their recommendation:
"We rate BROADCOM CORP (BRCM) a HOLD. The primary factors that have impacted our rating are mixed -- some indicating strength, some showing weaknesses, with little evidence to justify the expectation of either a positive or negative performance for this stock relative to most other stocks. The company's strengths can be seen in multiple areas, such as its largely solid financial position with reasonable debt levels by most measures, good cash flow from operations and expanding profit margins. However, as a counter to these strengths, we also find weaknesses including a generally disappointing performance in the stock itself, deteriorating net income and disappointing return on equity."