CSR slides after second profits alert

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Shares in the bluetooth technology specialist CSR crashed over 17 per cent yesterday after it gave its second profit warning in as many months due to weak growth in high-end handsets.

The semiconductor company's prospects have been dented as a result of handset manufacturers focusing on cheaper handsets for emerging markets like China and India.

That triggered a downgrade in fourth-quarter guidance from Cambridge-based CSR that specialises in bluetooth - the short-range wireless connection between devices such as headsets and mobile phones. The company expects revenue between $160m (£84m) and $180m during the last quarter of 2006 compared with the $200m it guided towards in September.

The company, previously one of the fastest growing shares in the UK technology sector, lost 30 per cent of its market value in September after a key customer cut short an order. At that stage it reassured investors that the market for bluetooth technology remained vibrant.

John Scarisbrick, the chief executive of CSR, remained confident that the company would perform well in 2007 as its market share has not been blunted and it continues to win over half of design contracts on offer.

He said that the company would target lower-cost phones next year as bluetooth became a mass-market technology. "Low-cost phones become our friend in 2007," he said.

Mr Scarisbrick said that the impending release of products such as a low-cost bluetooth headset, expected to retail between £8 and £10, and a cordless fixed-line phone that supports cheap internet-based calls will drive growth in 2007.