Wolfson has confirmed that one of its audio chips has not been selected by a major Tier 1 customer for inclusion in the next generation of its portable media players, expected to be launched during the third quarter of 2008.
The Edinburgh-based company's share price dipped sharply on the news, with investors believing the customer in question was Apple.
Wolfson has benefited greatly from audio codec design wins with Apple for both the iPod nano and iPhone. The company said it "continues to have a strong relationship with this customer" as a supplier for its other high-growth product areas, believed to refer to the iPhone.
Wolfson said that revenues from applications other than portable media players grew by 22% in 2007 and represented 76% of group sales.
"Revenue growth from these applications has continued to be very strong thus far in 2008, with particularly good performance in handsets, digital still cameras, gaming, headsets, GPS and automotive," said the company.
It said it expects the impact on revenues in the second half of 2008 from the design loss to be mitigated by stronger than previously anticipated growth across its customer base and application areas.
"We remain confident in achieving growth in 2008 and currently anticipates full-year revenue consistent with market expectations," said Wolfson.
Wolfson's guidance for first quarter 2008 revenue is in the range $44-$48m.