Evidently, the financial market liked what it saw in the management change.

Lee Simpson, equity analyst at Jefferies International Ltd., wrote that the "CEO departure means much may change...a potentially tighter reliance on audio and a turnaround focus (cost base, execution, royalties) may only be the start."

Clearly, the survival of ARC remains in precarious balance, as new CEO Geoff Bristow seeks ways to bring ARC back to profitability.

Regardless of the company's future, though, one thing is for sure: Carl Schlachte's presence at ARC will be thoroughly missed.

Virtually anyone who met Schlachte came quickly to regard him as one smart, affable executive with an infectious enthusiasm for his work.

At the helm of ARC over the past five years, he repeatedly re-defined the company's identity. Somehow, each time, he had a way of convincing the market and the people around him that every transformation was the key to the future.

First, Schlachte pitched ARC as one of the hottest configurable core companies. Next, ARC became known as an IP provider. Later, ARC, by going up the food chain in the consumer electronics world, assumed a new identity as a multimedia subsystem developer.

Since last year's acquisition of Sonic Focus—the owner of studio quality audio enhancement technology, ARC has evolved further as a provider of "sound-to-silicon" solutions for a number of chip companies.

As Mark Davis, analyst at Panmure Cordon & Co., pointed out, "For some time, we had believed that the company was on the cusp of achieving greater things—after all, the customer list suggests there is good technology in the business."

But in reality, ARC's financial results have been far from stellar. Davis noted that the share price performance speaks for itself, but he quickly added, "We'll miss Carl's enthusiasm and wit."

Could all these oft-changed core business strategies at ARC have kept the company's team from staying focused? Could this have led to the dismissal of Schlachte at ARC?

Tim Bajarin, president of Creative Strategies, Inc., says no. Every semiconductor company in Silicon Valley—fabless or not—goes through a lot of transitions, said Bajarin. "There is nothing wrong with that." Bajarin said, "Carl took the company as far as he could under the current strategy."