Broadcom’s New WICED Kit Promises To Speed Up The Launch Of New IoT Devices

Leading semiconductor provider for wired and wireless communications, Broadcom (NASDAQ:BRCM) has introduced a new development kit into its Wireless Internet Connectivity for Embedded Device (WICED) family to enable developers to rapidly prototype ideas and concepts for Internet-of-Things (IoT) devices and applications. The WICED sense kit promises to shorten the time between early ideas and end products by providing innovators of all sizes with a cost-effective platform that minimizes set-up time and enables rapid demonstrations of IoT concepts for hardware and software developers. Available for $19.99 through Broadcom’s network of distribution partners, the kit will help potential customers to build IoT prototype devices.

IoT includes all other computing devices apart from PCs, tablets and smartphones. Currently, the rising mobile adoption worldwide is driving growth in the semiconductor market. IoT is still at a nascent stage, but it is expanding fast and is considered to be the next big growth driver in the semiconductor industry. Gartner estimates the market will grow almost 30 times, from an installed base of 0.9 billion in 2009 to 26 billion by 2020. It will result in $1.9 trillion in global economic value-add through sales into diverse end markets. ^[1]

Broadcom Continues To Expand Its IoT Portfolio To Tap Growth in The Market

Broadcom highlighted its intention to tap growth in the IoT space in August last year, when it expanded its WICED portfolio with the launch of a new wireless platform (WICED Direct) specifically targeting the smart wearable components market. By allowing two devices to communicate with each other securely via Wi-Fi without an access point or computer, WICED Direct simplifies the implementation of Internet connectivity into an array of consumer devices.

In December 2013, Broadcom introduced a new Bluetooth Smart System-on-a-Chip (SoC) into the WICED family with a highly integrated design and smaller size, which helps reduce power consumption to extend battery life for wearables. The company claims that the Bluetooth Smart technology is growing at a rapid rate and quickly becoming the core of many small, battery-operated wearable devices.

Broadcom continued to expand its portfolio for wearable devices in 2014. In February, it introduced the industry’s first Global Navigation Satellite System (GNSS) SoC designed for low-power, mass-market wearable devices, such as fitness trackers and smart watches. It also launched the next-generation Near Field Communications (NFC) controllers designed to deliver simplified connectivity and drive adoption in mass market smartphones and wearables. The new controllers reduce power consumption by more than 60%, using 30% fewer components and a 35% smaller board area than previous generations. ^[2]  In June this year, the company introduced a new family of low-cost combo chips, which the company claims offers best-in-class performance for the advanced wearables market and rapidly growing entry-level smartphone market.

Broadcom is actively widening business opportunities in the IoT market by offering the breadth of IP and customized components that enable creative new smart devices to be connected. The market is quite competitive with companies including Qualcomm, Intel (NASDAQ:INTC) and Texas Instruments (NASDAQ:TXN) increasing their focus on developing chips for the market as well. However, by entering the market at an early stage, Broadcom aims to gain a significant footprint in this fast growing segment.

Our price estimate of $38.49 for Broadcom is in line with the current market price.

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1. Gartner Says the Internet of Things Installed Base Will Grow to 26 Billion Units By 2020, Gartner Newsroom, December 12, 2013 [↩]
2. Broadcom Drives New Field Communication into Affordable Smartphones and Wearables, Broadcom Press Release, February 24, 2014 [↩]