Friedman Billings’ channel checks have led it to significantly raise its Apple (AAPL) iPhone unit order estimates for the rest of 2008. And with more iPhones come more chips. FBR is now extra bullish on Marvell (MRVL) and Broadcom (BRCM):
Big positive revisions to 3Q and 2008 iPhone build forecast:
Our latest checks show forecasted calendar 3Q and 2008 iPhone build volumes have been revised significantly higher, with more than 15 million 3G iPhones plus two million old 2G iPhones forecast for 2008. With about seven million incremental units being built in 3Q versus 2Q, this data clearly has positive implications for iPhone chip suppliers… we think this will contribute an extra 3% sequential growth for Broadcom in 3Q (at $4-$5 of chip content per iPhone) and will contribute an extra 2% sequential growth for Marvell in 3Q (at $2-$3 of chip content per iPhone).
3Q iPod builds revised higher; 2Q build volumes largely unchanged:
Recent checks show Apple’s 3Q iPod build volumes were revised up by 15% since our last check and are now set to grow 35% sequentially.…We hear a new, lower priced Nano may be coming, as well as refreshed versions of the Touch and Classic. It seems likely that both BRCM and MRVL will have content in the refreshed iPod Touch, though we await firm details on this.
3Q PC builds revised higher for both notebook and desktop:
…Recent checks show Apple’s 3Q notebook and desktop build volumes were revised up by 10% and 20%, respectively, since our last check. Notebook and desktop build volumes are now set to grow 35% and 20% QOQ, respectively….Higher 3Q PC builds are a positive for BRCM and MRVL, both firms that have exposure to Apple’s PC products.
Apple’s is on the top of their game:
For Apple, the firm continues to knock the cover off the ball in terms of product innovation, sleek designs, attractive price points, and effective global deployment plans. These checks confirm Apple’s product cycle momentum continues to gain steam.
Friedman Billings maintains OUTPERFORM on Marvell (MRVL), target price $23.
Friedman Billings maintains OUTPERFORM on Broadcom (BRCM), target price $36.