Texas Instruments raised its outlook for the second quarter Monday, as analog chips and processors for high-end smartphones like the Palm Pre drive sales.
In a "scheduled update" to its business outlook for the second quarter of 2009, TI said Monday that it expects revenue of between $2.30 and $2.50 billion, compared with the prior estimate of between $1.95 and $2.40 billion. Earnings per share is now expected to be between $0.14 to $0.22, compared with the previous estimate of between $0.01 and $0.15.
Though analog chips are the biggest driver of sequential growth, TI is also seeing a bump in sales of its application processors that go into smartphones such as the Palm Pre. TI's 600MHz OMAP 3430 processor is the brain inside the Pre. The chipmaker also supplies power management, audio, and USB silicon for the Pre.
"Orders were strong in April and May," said Ron Slaymaker, vice president and head of investor relations at TI, in a conference call on Monday afternoon. "We see strength in smartphones--the high-end segment of the market," he said.
And Sprint Nextel executives said Monday that the launch of the Palm Pre on Saturday hit a new sales record for the company. More good news for TI.
The competition to get silicon into the latest and greatest smartphone and mobile Internet device is severe. TI vies for silicon real estate with Samsung, Qualcomm, and Marvell. And the field is getting increasingly crowded: PC industry heavyweights Intel and Nvidia are focusing their considerable resources on the market. Intel, the largest chipmaker in the world, clearly wants to be a major player in the smartphone market by 2011.
And Apple is in the business, too. Though Apple would like it if the iPhone remained a black box (it doesn't matter what's inside, it's the Apple brand on the outside that matters), it is involved in the design of the processors inside its iPhones, according to analysts. The processor inside the iPhone is supplied by Samsung, but branded as an Apple chip.
The TI chip in the Pre is a superscalar design based on the Cortex-A8 core from U.K.-based ARM. The 3430 features "a dedicated level-2 cache and execution of up to twice as many instructions per clock cycle" over previous chips, according to TI documentation. It also integrates a Powervr SGX 2D/3D graphics accelerator.