PortalPlayer, a fabless chip company based in San Jose, California says that company CEO Gary Johnson is leaving the company for opportunities in the start-up land. The company became a stock market darling because its chips powered the red-hot iPod.
“My true passion is in leading companies through their initial rapid growth,” said Mr. Johnson. “When I joined PortalPlayer, the company had one product and very limited cash. Today, it has several design teams working on products for three major personal multimedia player markets and nearly $200 million in cash.
Or is he getting out of dodge! While PortalPlayer has grown as a company, it is finding hanging onto Apple as a customer a tough act. Apple is now buying chips from Samsung and Sigmatel for iPod Nano and iPod Shuffle respectively. Lately there have been rumors that Nvidia might become a supplier for Apple’s next generation video iPod.
In the second quarter of 2006, PortalPlayer’s sales declined to $34.6 million from $44.6 million in second quarter of 2005. In first quarter of 2006, sales were just over $72 million. Profits plunged from $6.5 million a year ago to about $1.4 million.