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

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Marvell Technology (MRVL)The ultra-competitive mobile chip market is about to heat up even more. Marvell Technology Group Ltd. (NASDAQ:MRVL) just announced this week that it has a new quad-core processor for low-cost smartphones and tablets, mobile’s fastest-growing market.

One chip for all
Marvell’s new chip features a quad-core processor, as well as an integrated communications connectivity all-in-on-one chip. The main selling points for the PXA1088 are that it can handle smartphone or tablet processing and Internet connectivity, all with the ability to connect to global broadband standards. This means that smartphones with Marvell’s new chip could jump from country to country and never have to swap out a SIM card . The new chip also sports 3G, HSPA+, TD-HSPA+, and EDGE technology. Although the processor is made for inexpensive mobile devices, it can also handle multimedia games and shoot HD video.

As recently as 2010, Marvell built chips for some of Research In Motion Ltd (NASDAQ:BBRY) BlackBerry‘s most popular devices, but the company has since shifted its focus to other handset makers as BlackBerry chose QUALCOMM, Inc. (NASDAQ:QCOM) as its primary chip provider. Losing Qualcomm wasn’t good for the company, but Marvell has held its own as a major chip supplier to the Chinese market and its processors can be found in Samsung‘s Galaxy line on China Mobile Ltd. (ADR) (NYSE:CHL).

Marvell’s PXA1088 is made for 3G networks , and isn’t as fast as other chips on the market, like NVIDIA Corporation (NASDAQ:NVDA)‘s upcoming Tegra 4. But Marvell’s new chip does fill a need for powerful chips that are inexpensive enough for the developing world.

Why developing countries
Marvell is aiming its new chip at smartphone devices priced around $100 . China, Brazil, Russia, and Africa are some of the fastest-growing smartphone markets in the world and Marvell is positioning itself to sell chips that could work in any of these markets. Next year, China alone is expected to buy 235 million  smartphones, two times as many as American consumers are expected to buy.

Growth across these developing nations obviously doesn’t translate directly into sales for Marvell, but it does show that the company is smartly focusing on new areas of growth in the mobile market. Marvell isn’t moving into more mobile territory without a fight, though.

Worldwide tablet shipments were estimated to be about 122 million in 2012, and are expected to reach 442 million by 2016. This is good news for chip makers such as Marvell, considering that the developed world has barely even broken into the tablet market. But NVIDIA is the second-largest tablet chipmaker, behind Apple Inc. (NASDAQ:AAPL), with 17% revenue share. Marvell will have to compete with NVIDIA to get its new processor into tablets. Luckily, the company has some hands-on experience in the area considering it helped build  the current version of the One Laptop per Child tablet. The latest version was unveiled last month at the Consumer Electronics Show and is in the process of being sold to governments around the world

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