Cirrus Logic (NASDAQ:CRUS) seems in many ways the anti-InvenSense (NYSE:INVN). While it seems that the sell-side perpetually raises expectations for the latter, claiming that this time InvenSense will win meaningful content share inside of next generation Apple (NASDAQ:AAPL) products, longtime Apple supplier Cirrus Logic -- which has a fair amount of content across Apple's devices -- seems to be the subject of analyst reports claiming that it has lost content over at Apple.
What's the latest on Apple and Cirrus?
As a brief reminder, Cirrus Logic is well known for providing audio CODECs as well as audio amplifiers to Apple for its iPhone and iPad products. That said, things have started to seem a bit wobbly as Cirrus lost an audio amplifier socket inside of last year's iPad Air.
To compound matters, a research note from Rosenblatt Securities claims that Cirrus may have lost 50% to 100% of the power amplifier content within Apple's upcoming iPhone 6. The firm believes that this content is worth about $0.80 per unit, which is material over what could be well north of 100 million iPhone 6 models sold over the next year. (Cirrus' revenue this year looks to be about $700 million per consensus, so this would not be a trivial loss.)
Is this true? If so, should you panic?
Keep in mind that though these analysts are generally better connected than us mere mortals, their information isn't necessarily 100% accurate. For instance, last year, many of the major investment firms upgraded InvenSense on the prospects of material design wins within the iPhone 5s and/or iPhone 5c. This never materialized, much to the chagrin of InvenSense bulls.
Now, that's not to say that it isn't the case that Cirrus has lost this content -- it very well may have. However, the good news is that many investors have probably already factored in this share loss over at Apple, at least to some degree. That means that if the tear-downs show content loss, the stock is likely to lose value, but it won't be as severe as it would be if it were a complete surprise.
On the flip side, as noted in my prior piece -- if Cirrus ends up actually not have lost that content, then the "discount" that the market is probably applying to the share price in anticipation of this content loss is removed and the shares should rally.
Foolish bottom line
Cirrus Logic and InvenSense really do seem to be polar opposites. The former is beaten down on the expectations of iPhone content loss while InvenSense is rising on the prospects of content share gains over at Apple. It won't be long now before Apple's next-generation iPhone hits the shelves, so we'll know exactly Cirrus' and InvenSense's respective involvements with the iPhone 6 soon enough.