Roger Fingas
Power management tech supplier Dialog Semiconductor hasn't seen the same hit to its business that other Apple suppliers have encountered in recent times, CEO Jalal Bagherli claimed on Wednesday.
Bagherli credited the situation to Dialog technology being installed in many Apple devices. "Some products will have less volume, but others will have higher volume. So we have more chance of compensating [for] changes," Bagherli said at the Morgan Stanley TMT Conference in Barcelona, quoted by Reuters. "It is a volatile market, so there will be change almost weekly in terms of the forecast for the rest of the quarter or into the following quarter."
Dialog has already secured two Apple design wins for 2019, according to Bagherli, involving subsystem and charger components.
Several Apple suppliers — Japan Display, IQE, and Lumentum — saw their stocks fall this week based on lower revenue forecasts. Their performance has in turn hit Apple's share price hard, bringing it below $190 to levels not seen since July.
The source of problems may be the iPhone XR. While well-reviewed, and $250 cheaper than the iPhone XS, the product may not be selling as well as initially expected. TF Securities analyst Ming-Chi Kuo recently slashed his sales forecast for 2019 by 30 percent.
In October, Apple forged a $600 million deal with Dialog to license patents, buy assets, and recruit workers as it moves to bring power management in-house. Dialog is aiming to reduce its dependence on Apple to between 30 and 45 percent by 2022.
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6 Comments
Is this a possible insight as to how customers view Apple products? Compare this to the iPhone 5c, lower price means one is not getting the "real deal". Even though the marketing has tried to make it clear that the XR has mostly the same internals as the XS, customers see themselves showing everyone that they could not afford a "real" iPhone. How many iPhone 5c were purchased for children as Christmas presents? This does not continue sales after the season. And it enforces the "toy" view of the device. How many 5c's were upgraded to the iPhone 6 the next year? It seems that customers are viewed as swayed by price more than value. This could be showing that to not be true for some products. Apple may be viewed as unique enough to be damaged by the highly desired "market share" view of success.
Or, could it be there is no significant reduction is demand? II-VI just bought Finisar and last year bought Anadigix, both of whole compete with Lumentum for Apples VCell business. Could it possibly be that there was a shift in supplier to a newly dominant player? While I’m not as familiar with Japan display it would seems possible there is a similar story there. Could it be that analysts have their collective heads ....
Anyone with half a brain knows the markets assumed, ``....one of our largest...'' to be actually, ``...one of our largest Industrial and Consumer customers, Apple, for ...''
And that justified the next $15 in price reduction.