Friday, April 15, 2011, 10:35 am PT (01:35 pm ET)
Apple partner Cirrus Logic reports production problem with mystery audio deviceCirrus Logic has experienced manufacturing problems with an audio device that entered high-volume production in March, prompting speculation that the device is an Apple product.
Cirrus's analog chips are found in devices like iPods and iPads, and Apple is responsible for about half of the company's revenue. Cirrus disclosed the manufacturing problem this week, but did not disclose the identity of the affected product.
According to Dow Jones Newswires, analysts have already assumed that the affected product is Apple, given the amount of business Cirrus receives from the Cupertino, Calif., company. Cirrus said the problem with the new audio device resulted in reduced profits in the company's fiscal fourth quarter.
Cirrus said a chip it provided for a new product failed to meet a certain standard. Testing of the hardware found that fewer chips were working than had been expected.
Despite the issues, Cirrus President and Chief Executive Jason Rhode said he does not believe the successful launch of the affected product was impacted. He did not say whether the product has already been released, or is yet to go on sale.
Jeff Schreiner of Capstone Investments was one of those who has assumed Cirrus's issues lie with an Apple product. He reportedly said that Apple's strategy, which involves manufacturing new products quickly and at high volume, likely exacerbated the problem.
"Normally a customer may be willing to slow down their ramp, but not in this case," he said. "Apple was probably ramping the iPad 2 and other devices we haven't heard of yet."
If the affected product is in fact an Apple device, the most obvious hardware would be the iPad 2, which went on sale in March. Apple has struggled to keep up with demand for its second-generation tablet device since it first went on sale in the U.S. on March 11, and in 25 more countries on March 25.
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