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Summary:

If you believe in the dictum, that all mysteries are solved by following the money, then the latest financial update from Texas Instruments bodes well for the whole digital life ecosystem. The company today raised its revenue targets, up from $3-to-$3.24 billion to $3.12 to $3.24 […]

If you believe in the dictum, that all mysteries are solved by following the money, then the latest financial update from Texas Instruments bodes well for the whole digital life ecosystem. The company today raised its revenue targets, up from $3-to-$3.24 billion to $3.12 to $3.24 billion. It also indicated that chip sales are going to be in closer to the top end of its previous forecast, somewhere between $2.65 to $2.75 billion. Now a $100 million is clearly not a big number in larger scheme of things, but is a relative good indicator of things to come. For one, these are numbers for the second quarter, not exactly a quarter known for stellar performance. Secondly, since the chip sales of today end up in products that hit the shelves four-to-six months from now, this bodes well for the consumer electronics sector.

Given the close relationships between Nokia and Texas Instruments, my feeling is that Nokia is doing better than expected, and the recent product introductions have started to pay-off for the company. I have heard stronger than expected demand for its high end phones, especially the N-Series which is getting a lot of early buzz. Gartner recently increased its 2005 mobile-phone handset forecast to 750 million units from 720 million, which bodes well for Nokia and TI. Texas-based chip giant still has some problems – it has too much inventory of DLP chips, which are used in new kind of DLP television sets and projectors, which are moving far slower than expected. You can figure that out by lack of interest in those televisions versus LCD TVs, by visiting any local Best Buy store.

Nevertheless, these are good signs – and hopefully we shall hear from others as well reaffirming the good news!

By Om Malik

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