Soon Huat
2023-03-07

OK

@lolmei：
Apple is Broadcom$Broadcom(AVGO)$ 's largest customer and accounts for approximately 20% of revenue for FY22, or about $7 billion. Yet, while the loss of Apple as a customer would definitely impact Broadcom, the impact is expected to be much lower by 2025 as other parts of Broadcom are growing much faster, decreasing the percentage of revenue derived from Apple. Also, Apple has so far been struggling with replacing Qualcomm and has already had to postpone the release of its own 5G chips a couple of times. It could very well be that the replacement for the Broadcom products will also be finalized much later than 2025, and closer to 2027, giving Broadcom even more time to diversify its revenue stream. Obviously, the acquisition of VMware would already lower the Apple percentage quite a bit. As a result, I am not overly worried by this news.Bernstein analyst Stacy Rasgonhas also been downplaying the severity of losing Apple as a customer. The analyst states that losing Apple as a customer would impact FY25 EPS by approximately 3-4% and would not turn out to be material. Also, she believes Apple might be trying to negotiate a better deal as the current supply agreement ends at the end of this year. Overall, I don't believe this is something to worry about for investors.
Apple is Broadcom$Broadcom(AVGO)$ 's largest customer and accounts for approximately 20% of revenue for FY22, or about $7 billion. Yet, while the loss of Apple as a customer would definitely impact Broadcom, the impact is expected to be much lower by 2025 as other parts of Broadcom are growing much faster, decreasing the percentage of revenue derived from Apple. Also, Apple has so far been struggling with replacing Qualcomm and has already had to postpone the release of its own 5G chips a couple of times. It could very well be that the replacement for the Broadcom products will also be finalized much later than 2025, and closer to 2027, giving Broadcom even more time to diversify its revenue stream. Obviously, the acquisition of VMware would already lower the Apple percentage quite a bit. As a result, I am not overly worried by this news.Bernstein analyst Stacy Rasgonhas also been downplaying the severity of losing Apple as a customer. The analyst states that losing Apple as a customer would impact FY25 EPS by approximately 3-4% and would not turn out to be material. Also, she believes Apple might be trying to negotiate a better deal as the current supply agreement ends at the end of this year. Overall, I don't believe this is something to worry about for investors.

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