It's hard to predict the kind of impact the new Apple
Synchronoss rose to glory following its IPO in 2006 by inking several deals with companies such as Clearwire
With millions of iPhones being snapped up over ensuing months, Synchronoss' revenue and cash flow soared -- along with the stock. Investors saw international markets potentially fueling even more growth, but there was a hitch -- 78% of Synchronoss' revenue in the third quarter last year came from AT&T.
Synchronoss has made great strides in diversifying its customer base, but the revenue concentration for iPhone provisioning has stuck with the company. Caught digging through its recent 10-Q, fellow Fool Rich Smith pointed out that Synchronoss is still heavily dependent on AT&T, with 72% of first-quarter 2008 revenue coming from the carrier.
Now that Synchronoss has admitted in an 8-K filing that it will not participate in the on-site retail stores' activations of 3G iPhones, investors are bailing fast. The stock dropped around 17% on Tuesday, and that follows the more than 62% decline shares had already seen since the beginning of the year.
The lesson is simple: Companies that receive an overwhelming portion of their revenue from one source are especially risky and volatile. Yesterday's helium can quickly become today's cement shoes -- in other words, when times are good, revenue concentration makes you look like a star, but when times are bad, you're "sleeping with the fishes."
While some see the fall as a great buying opportunity, the full impact of Synchronoss being left out of the next iPhone game is not certain. For certain, until other customers such as Vonage
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