Monday, April 4, 2011

MIPS Technologies (MIPS) Pressured on "Deceptive" Article

Benchmark analyst Gary Mobley is maintaining a "Buy" rating on shares of MIPS Technologies (NASDAQ:MIPS), as he commented on an article written in Bloomberg Businessweek, which he asserted is deceptively written and suggests trouble for MIPS that might not actually be the reality.

The writers said that executives at various companies working on Android-based products have asserted that Google (NASDAQ:GOOG) is attacking “willy nilly” development in the sector, with the goal of stemming fragmentation of the operating system.

Mobley’s issue with it is that it makes it sound like Android will become standardized around ARM’s chip reference architecture and that as a consequence, “MIPS, MIPS’ licensees and Intel (NASDAQ:INTC) will be precluded from the Android-based application processor market. The implications, if the details of the article were true, could be a negative for MIPS.”

He concludes that “Based on conversations with our contacts, MIPS has welcomed a defragmentation effort by Google’s Android.”

“If application development and hardware development for Android became more standardized by Google, the time it takes MIPS to port the newest version of Android could shorten.”

MIPS closed Friday at $10.47, falling $0.02, or 0.19 percent.

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