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HOME arrow Wireless arrow Shares nosedive as CSR pays price for UbiNetics arrow Registration
Shares nosedive as CSR pays price for UbiNetics
Written by Alice Walker   
Thursday, 01 May 2008

CSR will now fully focus on connectivity centre
CSR will now fully focus on connectivity centre
Cambridge Bluetooth wireless specialist CSR took a hammering from the stockmarket after recording a £22m loss in its Q1 results and offering little hope for any significant pick up in Q2.
At one point following the announcement, the share pice was down 100p before rallying slightly to 324p – still 71p down on the morning’s start price (18.0 per cent).

Accepting that 2005 acquisition, UbiNetics, no longer offered an “acceptable level of growth” due to a crowded and mature baseband market, CSR decided to cease all future activities in the sector and take a one-off impairment charge of $52.9m (£26.6m).

CSR said it now had an absolute focus on the connectivity centre to expand its footprint in the
handset, a convergence of several connectivity technologies on a single piece of silicon in mobile phones and other portable consumer electronics products.

CSR revenues for the quarter to March 28 were in line with expectations at just under £81m. It expects Q2 revenues in the range of £88m to £100m.

CEO Joep van Beurden said despite an economic climate that was leading customers to lower their inventory levels and shorten order times in the consumer electronics and headset segments particularly, the longer term outlook was highly positive.

“We are much strengthened in this belief by the results of our operational assessment which we have now completed and which will be presented next week,” said van Beurden.

“In spite of these challenges, we are holding our leading market share in all market segments in which we compete. We have a promising pipeline of new product launches and strong design activity offering continued opportunities for growth.

“Our business is wireless connectivity and the projected growth of the wireless connectivity market is rapid, driven by rapid growth of smart phones and feature phones. The connectivity centre market is expected to grow strongly, from £1.8 billion in 2007 to over £3.5 billion in 2012.

“At the heart of this growth, we see the development of multiple technologies converging on a single piece of silicon and forming an increasingly powerful connectivity centre in mobile phones and other portable consumer electronics products.

“This trend is already being reflected by requests from our customers for product designs that combine wireless communication technologies. All the technologies we have identified are either in production or are in our current R & D pipeline.

“CSR is well placed to exploit this growth, as we are the established leader in Bluetooth, the centre of connectivity in today’s mobile phones. We have strong relationships with all the major mobile phone OEMs and the technological expertise to deliver products that meet their needs.”

The company has seen strong design activity in the first quarter, in particular in its BlueCore5, BlueCore6 and UniFi products. The recently launched MusiCore audio processor chip has been well received by potential customers.

Three of the top five phone OEMs are now actively engaged in MusiCore design projects and the other two are evaluating the solution. MusiCore increases the music playback time on a typical music mobile handset to around 100 hours and provides audio quality comparable to leading edge MP3 players.

CSR continues to perform strongly in the cellular handset segment and remains well positioned in its existing top tier customers. In addition, CSR now has multiple active design projects at a top tier phone OEM to whom CSR has not previously supplied.

BlueCore6 had an important design win at a top tier customer and started contributing to revenue in Q2 2008. Significant design-in activity is ongoing with other top tier customers.

CSR also continues to enjoy an undisputed leadership position across all segments of the Bluetooth headset market. This lead was furthered in Q1 2008 with the release of two new mono headset chips: BlueVox2 and BlueVox DSP. In addition, CSR believes the stereo headset market is poised for significant growth in 2008 with the demand being driven by the growing number of mobile phones designed to support Bluetooth stereo audio streaming, and other products such as MP3 players, PCs and gaming consoles.
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