Segment and Geographic Information

9 Months Ended

Sep. 30, 2012

Segment and Geographic Information [Abstract]

Segment and geographic information

13. Segment and geographic information

We operate in one reportable segment related to the selling and marketing of voice and audio processors and licensing of processor IP for use in mobile devices. We have identified our president and chief executive officer as the Chief Operating Decision Maker (CODM), who manages our operations as a whole. For the purpose of evaluating financial performance and allocating resources, the CODM reviews financial information accompanied by information by customer and by product.

Substantially all of our revenue was generated from the sale of our products to CMs and OEMs whose primary manufacturing operations and distributions are in Asia. Since our OEMs market and sell their products worldwide, our revenue by geographic location is not necessarily indicative of the geographic distribution of mobile device sales, but rather of where the mobile devices are manufactured. Our revenue is therefore based on the country or region in which our OEMs or their CMs issue their purchase orders to us.

Apple, one of our large OEMs, transitioned the majority of its business from the purchase of our processors to licensing of our processor IP, which is generated in the jurisdiction where this OEM has its headquarters in the United States. We began to recognize royalty revenue in 2012, which accounted for 21% and 31% of our total revenue for the three and nine months ended September 30, 2012, respectively.

Revenue percentages for the geographic regions reported below were based upon customer headquarters’ locations. The following is a summary of the geographic information related to revenue for the periods presented:

	Three months  ended September 30,						Nine months  ended September 30,
	2012			2011			2012			2011
China		20	%		61	%		21	%		79	%
Japan		—			2			—			1
Korea		57			37			47			20
United States		21			—			31			—
Other		2			—			1			—
Total		100	%		100	%		100	%		100	%

As of September 30, 2012 and December 31, 2011, substantially all of our long-lived tangible assets were located in the United States.