Wolfson set to ring up profits from iPhone sales

WOLFSON Microelectronics, the Edinburgh-based microchip maker, is expected to be a key beneficiary from the anticipated success of Apple's new iPhone.

That expectation has been seen in the 20 per cent increase in the firm's share price over the four days since the US computer giant revealed its latest handheld gizmo.

Wolfson, which has just bought Edinburgh-based audio technology firm Oligon for 2.9 million, has long been known to be the supplier for Apple's iPod, with its chips converting digital music files into audio sound. Similar technology is expected to be inside the iPhone, with Wolfson expected to retain its position as a key chip supplier to Apple.

Analysts have estimated that Wolfson, a spin-off from Edinburgh University headed by David Milne, receives royalties of around $1 (51p) for every iPod sold.

If it receives a similar amount for the iPhone, Wolfson could be in to pocket around 5.1m over the next year if Apple meets its sales target of ten million iPhones sold by 2008. The boost would be welcome for Wolfson, which has issued two recent profit warnings.

Susan Gordon at Charles Stanley said that 5.1m was "useful, though not a transformational contribution". But she said that if the device turns out to be a top-seller it could push volumes "significantly higher".

Wolfson is preparing for a number of changes in its board next month - including the retirement of founder Mr Milne on February 28.

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