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.
“Apple is now buying chips from Samsung and Sigma Designs for iPod Nano and iPod Shuffle respectively”
I have it that iPod Shuffle chips were supplied by Sigmatel, not Sigma Designs (which specializes in full-scale media processors and UWB chipsets). I don’t see a single press release showing a link between Sigma Designs and the Shuffle. Is there one?
Portal player will not hang onto the Apple contract for long. Apple Computer has no sense of corporate loyalty. Years ago, Bill Gates invested millions of dollars to keep Apple afloat, and Apple has rewarded them by running an aggressive ad campaign poking fun at the man responsible for the corporate health of their company today.
He may be making the right decision regardless. It seems to me that he is the kind of guy who likes to get things going, but he isn’t very good at sustaining things. For that you need a different kind of guy altogether, and him getting out the way probably makes space for the right kind of guy to come in and lead the company in its new season. His time is over, and a new season has come. I think it’s great that he seems to have realised this.