iPod chip maker PortalPlayer informed investors late Thursday that it has not been selected by Apple to power certain future flash memory-based iPods. In a statement, PortalPlayer said that “the follow-on to its PP5021 System-on-Chip, which is expected to be available in the second half of 2006, has not been selected by Apple for use in their mid-range and high-end flash based iPods.” (Emphasis ours.) The company said it believes the PP5021 will continue to be used “in other members of the iPod family.” While PortalPlayer’s non-selection announcement may seem out of the ordinary, publicly-traded companies are legally obligated to make certain positive and negative disclosures to investors. As Apple is believed to account for 90% of PortalPlayer’s revenue, such a loss could greatly impact the company’s performance.
Update: Following the warning announcement, shares of PortalPlayer tumbled 41 percent, or $9.46, to end Thursday trading at $13.13. “We were clearly surprised with the change,” PortalPlayer CEO Gary Johnson said on a conference call with analysts. “We are shipping in today’s video iPod’s, (but) the visibility for us has become more clouded.” Analysts said the news is the company’s worst nightmare. “This is a disaster,” said Jeffries & Co. analyst Adam Benjamin in a note to clients, who estimated that Apple represented 95 percent of PortalPlayer’s revenues in the December quarter. “We cannot overstate enough how disastrous this announcement is to PortalPlayer’s fundamentals as well as the stock price.”
Latest News
- Apple TV+ releases first look at Physical
- New Apple Card customers can enjoy up to 6 percent daily cash in new promo
- Ucam Private Home Security Camera is 21% off
- Grab the New 10.2 inch 32GB Apple iPad for Just $299
- MLB App removed On 3rd Gen Apple TV
- Apple TV+ ‘Roar’ to star Alison Brie and Nicole Kidman
- M1 MacBook Air: Long-term review!
- iOS 14.5 beta features improved subscription sheet
- Super Boost WiFi Repeater is 61% off
- Avanca T1 Bluetooth wireless earbuds are 50% off