Unless you're talking about Amazon.com's (Nasdaq: AMZN) popular Kindle Fire, Android tablets aren't selling. That's the message from this morning's results from Cypress Semiconductor (NYSE: CY).
While the chipmaker noted strong fourth-quarter gains for its TrueTouch capacitive technology for touchscreens, bookings for the first quarter came in light thanks, in part, to unreliable tablet sales.
As Cypress stated in its earnings press release, with emphasis added:
Our book-to-bill ratio for Q4 was 0.58, a decrease from that of Q3 and less than the normal seasonal figure. Consequently, we expect Q1 revenue also to decrease at a rate greater than normal. The expected decrease in revenue includes not only the seasonal factor, but also some revenue decreases due to tablet end sales.
Translation: We didn't supply anything to Amazon, and the rest of the Android tablet suppliers are also-rans when compared with the iPad.
Too harsh? Possibly, but Atmel (Nasdaq: ATML) also fell today on the news. Earlier this week, a Needham analyst cut his rating on both stocks as they work on excess inventory created by worse-than-expected tablet sales. Now it seems those fears were justified.
To be fair, Android tablets have long suffered from a software gap with the iPad. Google's (Nasdaq: GOOG) new Ice Cream Sandwich flavor of Android should help by unifying software-development efforts. Cypress has no control either way, so it's hard to fault the business on account of Android.
You might even say founder and CEO T.J. Rodgers is doing all he can. In November, Cypress certified TrueTouch for NVIDIA's Tegra 3 chip design for tablets, creating what should be a compelling hardware alternative to the iPad.
TrueTouch is also embedded into Research In Motion's PlayBook and Apple's (Nasdaq: AAPL) newer iPod nano models and Mac track pads, so this isn't a one-dimensional growth story. Nevertheless, it was Cypress and not analysts that called out tablets in its earnings press release. For investors' sake, here's hoping Google's tabby robot finally gets some momentum.
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