Wolfson proves that there's no cash in mobile

While conventional wisdom says that mobile chips should be making a killing, while PC technology bites the dust, audio chip maker Wolfson is in trouble.

The outfit makes chips for mobile phones, tablet PCs and hi-fi systems. Right now it should be in clover but for some reason it has issued its second profits warning in a month and launched a cost-cutting plan.

According to the Scotsman, Wolfson is reporting a “sharp reduction” in the past three weeks in orders from its customers. Given that its customers are Samsung and Blackberry-maker Research in Motion (RIM) this might be a suggestion that the mobile market is not doing as well as it appears.

The Tame Apple Press claims it is because Samsung and RIM are losing the battle against the glorious Apple brand. However it is more realistically indicating a general slow down in technology which is starting to affect the mobile markets.

Wolfson yesterday unveiled a $6 million package of cost cutting, which will see its global workforce of 430 staff reduced by a “single-figure percentage”.

Wolfson has said that the problems it faces are industry-wide – well other than Apple of course. But it failed to point out what those problems really are. Our guess is that the technology market is suffering due to economic worries and only Apple is doing well based on its fanatical fanbase.

Peel Hunt analyst Alex Jarvis has warned that the sharp reduction in customer orders was consistent across the industry, with Applied Materials and Novellus reporting similar patterns. This means that things are not going swimmingly in the mobile market as many had expected.

Wolfson has won contracts with LG and Samsung, HP and Toshiba and there is hope that next year will see it under the bonnet of tier-one smartphone platform design.