Synaptics Has The Right Touch With IPods, Rival Music Players.(THE IBD 100)

Byline: NANCY GONDO

When Apple Computer's iPods fly off shelves, it's music to Synaptics' ears.

The San Jose, Calif.-based company makes the technology behind the MP3 music player's touch wheel, which lets users quickly find, play or shuffle songs. Apple sold more than 2 million units in the third quarter, up from 860,000 in the prior three months.

And with the computer maker launching new models such as the iPod Photo and the U2 special edition, Synaptics could profit even more. It also sees potential from Apple's rivals as they put Synaptics touch technologies to work in their products.

Synaptics started off making touch pads and pointing sticks for notebook PCs, where it has more than 50% market share.

"The cornerstone of Synaptics' success is really our leadership role in the notebook market, where we have been continuing to innovate and succeed," said President and CEO Francis Lee. "At the same time we are really eyeing emerging launch segments of new markets."

The iPod's success has spawned rival products -- but that may just mean more business for Synaptics. Creative Technologies, Digitalway and Samsung are on board to use the firm's capacitive sensing technology, which replaces buttons, switches and other old-school controls.