Firm’s chip discovered in iPhone 5 cable
Investor eyes will be focused again today [16th October 2012] on tiny Edinburgh firm Wolfson Microelectronics following news that one of its chips can be found in Apple’s iPhone 5 cable. Yesterday shares in the company rose nearly 5 per cent when analysts at ABI Research revealed they had dismantled Apple’s new Lightning adapter and found a Wolfson processor inside. The Lightning adaptor replaces the 30-pin adapters that date back to early iPods and, with the iPhone 5 selling in their millions globally and alone responsible for a 1.1 per cent jump in US retail sales last month, it can only be good news for Wolfson.
Ironically, the firm’s success comes at a cost to fellow UK component supplier Volex which until now has derived up to an estimated 30 per cent of its revenues from Apple and whose own shares took a dive last month when it was realised that it was no longer a part of the iPhone equation.
Previously Wolfson provided audio chips for Apple’s early iPods, before Apple axed the relationship four years ago, opting for a different technology in later versions of its MP3 player.
That decision wiped around a quarter off Wolfson’s market value and the company has failed to make a pre-tax profit since.
Now analysts are predicting the newly-revealed partnership with the US giant will provide the firm with a much needed boost.
Commented one analysts, Alex Jarvis of Peel Hunt, “It is a major positive for Wolfson that it is supplying Apple again.”
The Wolfson chip in Apple’s new adapter is said to be a simple digital to analogue converter, rather than Wolfson’s more expensive Audio Hub chip used in Samsung’s latest smartphone, the Galaxy SIII.
In the first half of this year Samsung orders accounted for just over a quarter of Wolfson’s revenues and, with Apple also now on board, it seems likely that the Scottish firm’s fortunes are on the rise again.
Last night Wolfson’s shares closed at 210p on the London Stock Exchange.