- Cirrus Logic's shares decreased after Apple analyst Ming-Chi Kuo stated that the next iPhone would not have an increased use of Cirrus' technology, which is responsible for powering Apple's haptic touch feature.
- Kuo had previously indicated that touch buttons would replace physical volume keys on the iPhone 15 Pro, but this change was abandoned due to "unresolved technical issues," according to the analyst.
- This announcement suggests that the demand for Cirrus' technology may be impacted, and could affect the company's future financial performance.
Cirrus Logic is a key player in the development of Apple's haptic touch systems, which have allowed the replacement of physical buttons on some iPhones with touch-sensitive buttons that emulate the feeling of pushing a button. In the most recent quarter, the company's revenue was predominantly derived from its "largest customer," which is widely believed to be Apple and contributed around 88% of the company's total revenue.
While Kuo had previously stated that Apple would expand the use of Cirrus Logic's technology to include solid-state technology that would replace physical volume buttons, his latest note on Tuesday evening disclosed that the plan had been cancelled due to "unresolved technical issues" faced by the tech giant.
According to Kuo's statement on Tuesday, investors had expected that the new solid-state button design would lead to higher profits and revenues for suppliers. Therefore, Cirrus Logic (the exclusive controller IC supplier) and AAC Technologies (the Taptic Engine supplier) are particularly affected by the decision to abandon the change.
AAC's shares, based in Shenzhen, China, dropped by almost 15%. However, neither Cirrus nor Apple provided any immediate comment in response to requests.
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