IT HAS been a relationship that helped build, then wound, one of Scotland's top technology companies. But until now, it was a love that dare not speak its name.
After supplying components for the millions of iPods and iPhones sold around the world but being publicity shy over the business, Wolfson Microelectronics yesterday finally confirmed it products are used in Apple's iPhone.
Sadly from the company's
point of view, it did so only to warn that it may not be in that particular relationship for much longer. Because of Apple's strict confidentiality policy, Edinburgh-based Wolfson has until now only been able to give its relationship with the technology giant a perfunctory mention among a list of customers.
Yesterday morning, Wolfson, which makes chips which convert digital signals into sound, released a statement confirming it had a component in the existing Apple iPhone.
The statement had a sting in its tail, though, warning that Wolfson had been informed that its components were not in the latest generation iPhone, which was unveiled on Monday.
Despite the previous secrecy, the market has long been aware of Wolfson's relationship with Apple, and its fortunes have largely risen and slumped on it.
Wolfson was the first major technology flotation after the dotcom downturn, listing in 2003, and later rocketing into the FTSE-250 on consistent strong growth. Known to supply components to virtually all of the iPod products for several years – and more recently the iPhone – this seemingly "special" relationship with Apple underpinned the market's confidence in Wolfson, its market capitalisation peaking at just over $1 billion.
Its value slumped 18 per cent on the day Wolfson revealed that "a major tier-one customer" – known to be Apple but never formally confirmed to the market – had designed it out of some of its products in March 2008.
In January it was revealed that Wolfson knew it was losing the major chunk of work from Apple without telling the market for a fortnight because Wolfson maintained that it did not need to because sales elsewhere were strong. That decision led to a £140,000 fine from the Financial Services Authority.
Wolfson's shares were comparatively steady yesterday, easing 2 per cent to 111.25p, the market apparently unfazed.
While the new iPhone will be in demand, the existing, cheaper version is rumoured to be set for a major launch into China in the near future.
Wolfson received a morale boosting product win last week for a new Nokia phone, its first ever contract with the world's largest mobile phone maker.
