Apple unlikely to use our technology in new iPhones: Audience

Audience Inc, which makes chips used in Apple Inc's iPhones, said its top customer is unlikely to use its technology for the latest iPhone, sending Audience shares down 58 percent in after-hours trading.

Audience's chips improve the voice quality in mobile devices by filtering out background noise, and the company supplies these to Apple's contract manufacturers like Foxconn International Holdings Ltd and Protek Ltd.

The Mountain View, California-based company also sells processors and licenses its processor intellectual property to Apple and some of its units.

However, the company said in a statement that it now believes Apple is unlikely to use its processor technology in the iPhone 5, which is expected to be launched next week. Audience has been selling to Apple since 2008.

An Audience executive was not immediately available for further comment.

For Audience, Apple's licensing of the filtering technology accounted for 37 percent of total revenue for both the three and six months ended June 30.

The company, which also counts Samsung Electronics Co Ltd among its top customers, said in a regulatory filing in May that a reduction in orders from one or more of its customers could significantly harm its business, financial condition and cash flows.

Loss of Apple contract, however, will not impact Audience's third-quarter results but would affect it a quarter after Apple starts selling its next-generation mobile phones, the company said in a statement.

Audience raised its third-quarter revenue outlook to between $35 million and $38 million from its prior forecast of between $33 million and $36 million. It expects an adjusted profit of 14 cents to 18 cents per share.

Analysts on average were expecting a profit of 11 cents per share on revenue of $34.7 million, according to Thomson Reuters I/B/E/S.

The company competes with Maxim Integrated Products Inc, ON Semiconductor Corp, Qualcomm Inc, Texas Instruments Inc, Wolfson Microelectronics Plc and Yamaha Corp.

Shares of the company, which went public in May, fell to $7.99 in trading after the regular market close. The stock closed at $18.86 on the Nasdaq on Thursday.

Audience, which had a market value of about $380 million at close of regular trading on Thursday, lost $200 million in value in extended trade.

Copyright Thomson Reuters 2012