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.