SAN FRANCISCO—A report that Cirrus Logic Inc. has lost the coveted audio codec socket in the forthcoming iPhone 5 from Apple Inc. is factually inaccurate and not credible, according to a Wall Street analyst.
The report, which originated in Taiwan Economic Daily News, caused Cirrus Logic stock to dive by as much as 15 percent. The report indicated that the iPhone 5 audio codec slot went to Wolfson Microelectronics Inc.
According to Vernon Essi, a vice president of equity research at Needham & Co. LLC, the article, published in Mandarin Chinese, focuses on the favorable impact Qualcomm Inc. would have to Taiwan Semiconductor Manufacturing Co. Ltd. if Qualcomm were designed into the iPhone 5. The article quotes a source saying that other chips in the iPhone 5 will come from the same vendors as the previous generation iPhone. This would include Cirrus Logic, which has a virtual lock on the audio codec slot, according to market research firm iSuppli Corp.
According to Essi, the article references older iPhone vendor material, possibly from the iPhone3G, to list suppliers, including Samsung Electronics Co. Ltd. as the CPU supplier. Starting with the iPhone 4, Apple began using its own internally developed A4 as the processor.
Though he stressed he does not know what components will be in iPhone 5, he said the Tawian Economic Daily News article was not credible and gave him no reason to alter his bullish stance on Cirrus Logic. Needham and Co. maintains a "buy" rating on Cirrus Logic stock.
Cirrus Logic did not immediately respond to request for comment on the matter.
After a significant decline in early Nasdaq trading Thursday (Sept. 30), Cirrus Logic rebounded to $17.97 in late afternoon trading, down about 6 percent from Wednesday's close.