Cirrus Logic (Nasdaq: CRUS) is a well-known play on the success of Apple (Nasdaq: AAPL). As the provider of audio chips to iPods, iPads, and other iGadgets, Cirrus rides Cupertino's coattails like the wind.

Today, Apple stands for a whopping 59% of Cirrus' sales. Can the company grow beyond its Apple addiction in 2012? Let's run down a few reasons you might want to buy, sell, or hold Cirrus shares today.


  • Apple: "Our relationship with them continues to be outstanding, with great visibility and ongoing design activity on innovative and challenging projects," Cirrus says of its euphemistic "largest customer." You could certainly pick worse bandwagons to jump aboard.
  • We're hiring: Cirrus has plumped up its total head count by 18% over the past year in an effort to keep research hearty and hale. Management says that many projects span two or three years from kickoff to final production shipments, so this hiring spree is a sign of big long-term growth. If nothing else, Cirrus would hardly be hiring like this if Apple had showed any signs of being unhappy with Cirrus' products.
  • Cuddle up closer: As the Apple relationship shows, Cirrus likes to produce specialized chips to exact customer specifications. "When we are successful with this approach, one initial design win can expand into many additional products and a long-term relationship," management says. The company just shipped out its first custom car audio chip to Harman International Industries (NYSE: HAR), for example -- the opportunity to expand beyond Apple is huge.


  • Apple: With so many eggs in the Apple basket, the slightest rumor that Cupertino is looking for other audio solutions is enough to absolutely crush Cirrus shares. That happened in 2010, dropping share prices by more than 20% in a matter of days, even though the rumors turned out to be baseless. Ask shareholders of OmniVision Technologies (Nasdaq: OVTI) how much it hurts when competitors really do move in on your exclusive Apple turf. What if there's substance in the next rumor?
  • Long product cycles: That two-to-three-year lag between design starts and selling actual chips is risky. How much R&D wood can you put behind each arrow when a few of them might be aimed at terrible targets? Wolfson Microelectronics provided audio solutions for both the Research In Motion PlayBook and the Hewlett-Packard TouchPad, so Cirrus dodged those miserable bullets. But the next bomb might fall right in the company's lap.


  • Patience, young grasshopper: Share prices are back where they were a year ago, even as the long-term growth story continued to play out. Shouldn't Mr. Market start taking his meds again one of these days?

What's the story?
Cirrus has come a long way from making basic graphics chips for early PCs. Now a vital part of the hypergrowth mobile-computing market, Cirrus is poised to cash in on investments and promises made years ago. And as long as that muscle-bound bull named Apple is pulling the cart, it's hard to bet against the company.

So I see Cirrus as a solid buy today. Your fellow investor would agree, judging by the stock's perfect five-star CAPS score.

It's hardly the only top-notch investment available in the mobile space, though. Check out another terrific idea in smartphone and tablet chips.

This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium advisory service. We’re motley! Questioning an investing thesis -- even one of our own -- helps us all think critically about investing and make decisions that help us become smarter, happier, and richer.