This Apple Play Is Getting Hammered -- and for Good Reason

Beware the stock that depends on the largesse of a few signature clients.

Shares of Fusion-io (UNKNOWN: FIO.DL  ) are down more than 15% today on guidance that came in well below Wall Street's estimates. The company, whose flash memory technology operates directly and in tandem with the central processing unit of a server, said fiscal Q3 revenue would come in at just $80 million. Analysts were expecting at least $137 million for the quarter and $530 million for the full year.

Earlier, Fusion-io predicted at least 45% revenue growth during fiscal 2013 -- or $520 million minimum. Now, management is targeting somewhere between $420 million and $440 million.

Go ahead and blame Apple (NASDAQ: AAPL  ) and Facebook (NASDAQ: FB  ) . Oh, and Hewlett-Packard, too. Combined, these three accounted for 69% of Fusion-io's revenue in fiscal Q2, down a point from 70% in the prior quarter. Facebook, at 34%, led the way while Apple's 16% share ranked second. Both are cutting back on orders.

"The change in our guidance is a result of a shift in the timing of both purchases from our two key accounts, specifically for the next two quarters," said David Flynn, Fusion-io's CEO and president, in a conference call with analysts.

"When building out data centers and expanding into new application areas, these customers have purchased in large volumes. They are now achieving greater efficiency thanks to our products, which has led to a shift in their near-term demands."

Translation: we've done such a great job for Apple and Facebook that they don't need us for at least the next two quarters. Ouch.

Has Fusion-io effectively disrupted itself, or is this a short-term blip? I'm inclined to give management the benefit of the doubt, if only because I believe there will continue to be efforts to process more data, faster, without using too much power. That's a tough combination that demands the sort of hyper-efficient architecture Fusion-io is pitching.

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