Recent research shows that Apple Computer's new iPod Shuffle does not contain an MP3 decoder chip from SigmaTel. Instead, Samsung Electronics is likely to have won the socket, according to a note released today from Craig Berger, an analyst with Wedbush Morgan Securities.

Berger said that Apple Insider, a news and rumor blog centered on the consumer electronics company, has performed a teardown of the new second generation Apple iPod Shuffle and has concluded that SigmaTel is not the processor supplier in this device, as had previously been thought.

According to Berger, the processor is an Apple logo-stamped ARM chip, similar to the Apple logo-stamped ARM chip found in the new iPod Nano that is known to be a Samsung chip.

The findings have impacted the firm's outlook on SigmaTel's business for the coming months. Wedbush has reduced its 2007 revenue estimates for SigmaTel by a whopping $30m, and cut its 2007 EPS estimate from minus 60 cents to minus 85 cents.

"We remain guarded about the key revenue and gross margin assumptions being used to drive SigmaTel's forecast and expect continued losses in 2007," Berger said in the note. "With continued EPS losses likely through 2007, we think investors should continue to avoid this segment of the chip market and instead prefer other chip segments and other stocks as more compelling investment alternatives."

Apple, SigmaTel and Samsung could not be immediately reached by Electronic News for comment.