Audience Inc(NASDAQ:ADNC), which makes chips for Apple
Inc.(NASDAQ:AAPL)’s iPhones, said on Thursday that the Cupertino company is
unlikely to use its chips on its new iPhones.
Apple is releasing its much awaited and anticipated
iPhone 5 on September 12.
Shares in Audience plummeted 69 percent after the
company made its statement. The share price fell to $5.85 in the opening
session and wiping out nearly $200 million in market capitalisation.
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The company supplies its chips - used to improve voice
quality in mobile devices - to firms such as Foxconn and Protek who do contract
manufacturing for Apple.
"Events of the last week in the normal course of
business led us to believe that our technology is not likely to be enabled in
Apple's next generation mobile phone," Audience Chief Executive Peter
Santos said.
Audience, which has been supplying to Apple since
2008, told analysts in a conference call that the iPhone maker has been building
up its own audio team over the years. However there were no clear details why
it would not use chips made by Audience.
The company also makes processors that are licensed to
Apple and its other units. This licensing brings in 37 percent of its total revenues
for Audience.
It still continues to get royalties for the technology
used by earlier iPhone versions.
"We are not aware of any intended changes by this
OEM (original equipment manufacturer) in its use of our processors and
processor IP in prior generation mobile phones," Santos said.
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