iPhone 5 Countdown: Audience Is Not a Winner

The iPhone 5 launch on Wednesday, Sept. 12, is sure to be the most important event for tech investors this year. The Motley Fool will be hosting a live chat where our top tech analysts will answer your questions and break down what the announcement means for Apple and tech investors everywhere. Be sure to swing by Fool.com at 12:45 p.m. ET next Wednesday for all your coverage of Apple's next big announcement.

Sept 12.

That's the date the tech world will be watching as Apple (Nasdaq: AAPL  ) unveils its iPhone 5 to the world. That puts us at T-minus four days to the event, so investors need to make sure they're fully prepared for the opportunities that lie within.

Source: The Loop.

This year's model will put up massive unit sales figures. Some estimates range as high as 250 million units throughout the product's life cycle, which would more than double lifetime unit sales to date. For numerous component suppliers, that spells profits as they ride on Apple's coattails to riches. Leading up to the event, I'm going to outline a handful of companies that I think will be winners of the iPhone 5.

Voice and audio processor IP: Audience
Not many investors are familiar with Audience (Nasdaq: ADNC  ) , but I think they should be. The company just went public and has historically sold digital signal processors to Apple, its largest customer via contract manufacturers. Its chips work in conjunction with the audio codecs that Cirrus Logic (Nasdaq: CRUS  ) provides.

Starting in the fourth quarter of 2011, Apple's relationship with Audience changed. Instead of buying physical processors from the company, the iPhone maker has licensed and now incorporates Audience's intellectual property into its phones in exchange for royalties. This has two effects on the business: Revenue may see downward pressure, as royalties are less than what Audience fetches for its standalone processors, but this relationship will be more profitable and gross margin should increase.

Audience just recently dropped a bomb: The company now doesn't believe its processor IP will be featured in the iPhone 5, with shares quickly losing more than 60% of their value on that gloomy realization. It looks like Audience will not be a winner from the iPhone 5.

This is just a taste of a comprehensive iPhone 5 report I've put together as a bonus for subscribers of The Motley Fool's premium research service all on Apple. The complete report is available at no additional cost when you sign up, so be sure to grab your copy today and position yourself to profit on the most important smartphone launch of the year.

Fool contributor Evan Niu owns shares of Apple, but he holds no other position in any company mentioned. Check out his holdings and a short bio. The Motley Fool owns shares of Cirrus Logic and Apple. Motley Fool newsletter services have recommended buying shares of Apple and creating a bull call spread position in Apple. We Fools don't all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. Try any of our Foolish newsletter services free for 30 days. The Motley Fool has a disclosure policy.


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