(Corrects figure to $38.7 million, not $38.7 billion, in
By Noel Randewich
SAN FRANCISCO Jan 31 Audience Inc
seems to be doing pretty well, even with less of Apple: the
audio technology company forecast quarterly revenue well above
Wall Street's expectations, helped by more business from Samsung
and other smartphone makers.
Shares of Audience jumped 24 percent in after hours trading,
after the company said Thursday that it expected revenue between
$43 million and $46 million in the March quarter, versus
analysts' average estimate of $31.8 million, according to
Thomson Reuters I/B/E/S.
Audience, which went public in May 2012, saw its stock slump
58 percent in a single session last September on news that Apple
Inc, to which it had been a supplier since 2008, would
likely drop its noise-filtering technology in future iPhones,
including the iPhone 5.
Its quarterly report underscored the increasing opportunity
for Apple's suppliers to look to Samsung Electronics Co Ltd
and other mobile device makers to fuel their growth
as the iPhone and iPad face stiffer competition.
"Most people bought this stock at the IPO because it was an
Apple business. But there's life without Apple," said Jay
Srivatsa, an analyst at Chardan Capital Markets.
Audience executives said that more business from Samsung and
other smartphone makers would offset dwindling revenue from
Apple as fewer and fewer older iPhones that use its technology
Audience's chief executive, Peter Santos, told Reuters that
as growth in smartphone sales moderates, manufacturers would
fight more for market share.
"This idea that things stay the way they are - that Apple
has a dominant position - I think we're seeing early signs that
that's not going to be a permanent situation," Santos said.
"What they've done and continue to do is great, but the world is
The amount of Audience's revenue that comes from Apple fell
from 40 percent in the September quarter to 33 percent in the
Chief Financial Officer Kevin Palatnik said Apple would
continue to contribute about a third of Audience's revenue in
the first quarter, and then decline further this year as Apple
launches new devices.
Samsung accounts for more than half of revenue at the
Mountain View, California company, which sells chips and
licenses intellectual property that improve voice quality in
mobile devices by filtering out background noise.
To be sure, even with the jump in Audience's shares
following its results on Thursday, its stock price is still 20
percent lower than before it disclosed its loss of Apple's
Audience's technology is used in Samsung's Galaxy S3
smartphone, giving it a reasonable chance that it will also be
used in future Samsung devices.
"Part of the reason Q1 is so good is they're potentially in
the Galaxy S4 that's going to be launched in the April-May
timeframe," said Srivatsa of Chardan Capital.
Audience's technology is not used in the iPhone 5, but it is
used in two prior generations of the smartphone.
Apple sold a record 48 million iPhones in the December
quarter, but its share of the overall market is expected to peak
this year at 22 percent and become dependent on repeat business
from loyal customers unless it accepts lower margins by making
low-cost iPhones, according to ABI Research.
In the fourth quarter that ended in December, Audience
posted revenue of $38.7 million, up from $18.0 million in the
year-earlier period and beating analysts' expectations of $31.8
million. Quarterly net income was $3.1 million, or 14 cents per
share, swinging from a net loss of $5.6 million, or $5.56 per
share, a year earlier.
Audience's shares were 24 percent higher in extended trade
after closing up 2.86 percent at $12.22.
(Reporting By Noel Randewich; Editing by Carol Bishopric and