Feb. 9 (Bloomberg) -- Marvell Technology Group Ltd., maker of the processor that runs BlackBerry smartphones, said the success of tablet computers and phones that surf the Web is a bigger threat to traditional personal computers than laptops.
Computer makers will respond to Apple Inc.’s iPad and other tablets with more powerful laptops to emphasize the difference in capabilities, Marvell Chief Executive Officer Sehat Sutardja said in an interview. That in turn will narrow the gap between laptops and machines that sit under the desk, he said.
“We’re already seeing a steady decrease in the market for monster PCs as the performance of laptops has significantly increased,” he said. “This is good for the industry because desktops are typically left under the desk for five to seven years, whereas consumers replace their laptop every two to three years.”
Marvell is facing concerns that new technologies and slowing PC sales will hurt the market for chips that control hard-disk drives, which it dominates. The Santa Clara, California-based company is also trying to convert its foothold in the mobile-phone market with Research In Motion Ltd.’s BlackBerry into orders from other phone and tablet makers.
“People want to see some design wins,” said Chris Caso, an analyst at Susquehanna International Group in New York. “Over the next three years, hard drives are going to lose share to solid-state drives.”
Marvell’s chips control about 60 percent of computer hard-disk drives sold, according to Caso. As new drives based on chips rather than spinning magnetic platters take hold in the PC and tablet markets, Marvell may struggle to replicate its success in controllers for these so-called SSDs, he said.
Marvell has been working on controller chips for the new drives for years and is already supplying Intel Corp. and Micron Technology Inc. with the new products that are more profitable, said Sutardja. The cost of the new storage drives is also slowing their adoption.
“I just don’t see them going to even 20 or 30 percent of the world anytime soon,” he said.
Marvell will begin to show progress in getting its chips into more smartphones and tablets starting late this year, Sutardja said. Most models on the market today rely on multiple chips to provide the main radio, processing and other communication functions.
Over time, handset makers will begin to use new chips that combine the abilities of multiple semiconductors into one piece of silicon. That saves space for more compact designs, cuts costs and allows phones to go longer between battery charges.
Marvell, Qualcomm Inc. and Broadcom Corp. are among only a few companies that have all the technologies -- including Wi-Fi, application-processing and cellular-baseband chips -- that need to be built into such multifunction products, according to Caso.
“Space is at a premium. Power consumption is at a premium,” Sutardja said. “Integration always wins.”
Marvell’s processors, like those of Qualcomm, Broadcom and Texas Instruments Inc., are based on technology from ARM Holdings Plc.
Marvell fell 37 cents to $19.87 at 4 p.m. New York time in Nasdaq Stock Market trading. The shares have gained 7.1 percent this year. The company is registered in Hamilton, Bermuda.
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