iPhone 5 processor keeps Audience waiting

iPhone 5 processor keeps Audience waiting

LONDON – Audience Inc. (Mountain View, Calif.), a supplier of audio processing ICs and intellectual property (IP) that conducted an initial public offering of shares in May 2012, has stated that Apple is unlikely to "enable" Audience's IP in its next generation mobile phone.

Apple is expected to launch the iPhone 5 on Wednesday Sept. 12.

However, rather than being a design loss for Audience, which has been present in prior generations of the iPhone in the form of dedicated audio processors, this could mean that Audience will continue to supply Apple with separate audio processors and that Apple has opted not to move the audio processing function into the application processor at this time. Audience is also designed in with many other smartphone and tablet computer makers including Samsung, HTC, Huawei, Acer, Sharp and LG.

Audience's EarSmart technology uses a DSP chain to mimic the workings of the human inner ear and seeks to distinguish and interpret sounds as people do, thereby enhancing the audibility of voices and filtering out unwanted background noise.

In a statement made on Thursday (Sept. 6) Audience said it had developed and licensed a new generation of audio processing IP for use in Apple's devices. The company added: "Audience now believes that it is unlikely that the OEM will enable Audience's processor IP in its next generation mobile phone. Audience is not aware of any intended changes by this OEM to its use of Audience's processors or processor IP in prior generations of the OEM's mobile phones."

Peter Santos, president and chief executive officer of Audience, commented, "While we are disappointed by this development, we are confident in the diversification of our business and see sustainable growth in 2012 and beyond. As such we are raising guidance for the third quarter of 2012."

Audience's share price fell from about $19 to a low of $5.80 on the announcement but has subsequently climbed and was trading at over $7.00 on Monday (Sept. 10).

One day after Audience made its announcement about Apple, the Law Offices of Howard G. Smith announced that it is investigating potential claims against Audience Inc. concerning possible violations of federal securities laws. The investigation focuses on allegations that certain statements issued by Audience between May 10, 2012 and Sept. 6, 2012, regarding Audienc's business, operations and financial condition were false and misleading.

At the time Audience went public it had just recognized its first licensing revenues after several years of of only being a fabless chip vendor. For the first quarter of 2012 Audience reported $11.7 million of revenue due to IP licensing out of a total sales revenue of $31.1 million.


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