Audience Says Apple Might Not Use Their Noise-Cancellation Tech in the Next iPhone

Reuters reports Audience has noted to shareholders its top customer, Apple, most likely won’t use its noise-cancellation technology in the next iPhone, which has caused the company’s shares to drop 46 percent in after hours trading:

Audience shares were down at $10.11 in trading after the bell. The stock closed at $18.86 on the Nasdaq on Thursday.

Ouch. As of writing the after hours price is at $8.80/share. Audience notes this announcement will not affect its 2012 Q3, but the quarter after Apple starts selling the next iPhone.

According to Audience, via StreetInsider:

Audience now believes that it is unlikely that the OEM will enable Audience’s processor IP in its next generation mobile phone. Audience is not aware of any intended changes by this OEM to its use of Audience’s processors or processor IP in prior generations of the OEM’s mobile phones.

In May of last year, Chipworks discovered it was Audience that powered noise cancellation in the iPhone 4, as revealed via X-ray. This February, some reports speculated the absence of Siri on the iPhone 4 was related to the lack of Audience’s specific “EarSmart” noise reduction technology.

If you’re lucky enough to be part of the lucrative Apple supply chain, you strike it rich. The moment you get pushed to the outside, you fall back to reality.

Founder and Editor-in-Chief of iPhoneinCanada.ca. Follow me on Twitter, and @iPhoneinCanada, and on Google+.

  • So are they using something else, or going without? I hope there is SOMETHING that will handle noise cancellation as I work in constantly noisy environments and the cancellation is the only thing that has made my iPhone actually usable for phone calls while at work.

  • There most likely is a new company involved, other than Audience. Noise cancellation at this point is essential.

  • hub2

    A bit OT, but from the headline I thought Audence was denying permission (“may not”) for Apple to licence their tech. “Might not” would have been clearer

  • Ah, just saw that now. Will clarify. Thx.

  • jabohn

    I thought the same thing hub.

  • Holly

    My noise cancellation headphones (HF3 Etymotic) have never worked properly on the iPhone 4S. Instead of canceling the noise, they feed the ambient noise into your ears, making phone calls in noisy environments impossible. Did not have this issue with the iPhone 4. Hoping the iPhone 5 resolves this issue.

  • Interesting.