You know, the process by which other companies with close ties to Apple often get a lift in their stock prices from built-up anticipation for increased demand of their own products. I've often called it "achievement by proxy." Nevertheless, a win is a win.
However, I'm beginning to suspect that one name that won't be celebrating this time around is Audience (ADNC), a company that specializes in voice and noise suppression technology and has long been a staple in previous iterations of the iPhone.It seems the company has now been silenced. The company decided to take a proactive approach and notified investors it had not been involved in the typical pre-launch discussions with Apple -- suggesting the possibility Apple would not extend their relationship. Although Apple has yet to confirm this, investors have decided not to wait around for verification and opted to "sell the rumor." Was it premature? Last week, Audience stock traded as high as $18.90. As of Wednesday, the stock lost 64% of its value, closing at $6.75. It's hard to imagine a drop of this magnitude would be the result of just a rumor. But this is the risk of going into business with Apple -- or, more appropriately, this is the danger of having one major client generating the lion's share of your press or revenue. This raises many questions. Has Apple decided to go with another vendor? Should investors now turn their attention to that stock instead? Or has Apple decided the iPhone 5 is so supreme it does not need voice/noise suppression? Or maybe Apple has decided to use the technology of an existing partner, such as Qualcomm, which is capable of doing the same thing except in a software format instead of hardware. Regardless of the reason, this is certain to be a major blow to Audience. While the impact in terms of revenue may not be immediately felt, 2013 is assured to be a very challenging year. This is even though Audience still has major clients including Apple rivals Samsung and Google (GOOG).
Select the service that is right for you!COMPARE ALL SERVICES
- $2.5+ million portfolio
- Large-cap and dividend focus
- Intraday trade alerts from Cramer
- Weekly roundups
Access the tool that DOMINATES the Russell 2000 and the S&P 500.
- Buy, hold, or sell recommendations for over 4,300 stocks
- Unlimited research reports on your favorite stocks
- A custom stock screener
- Upgrade/downgrade alerts
- Diversified model portfolio of dividend stocks
- Alerts when market news affect the portfolio
- Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
- Real Money + Doug Kass Plus 15 more Wall Street Pros
- Intraday commentary & news
- Ultra-actionable trading ideas
- 100+ monthly options trading ideas
- Actionable options commentary & news
- Real-time trading community
- Options TV