Dialog Semiconductor is anticipating a drop in revenues for 2019, in part due to the completion of a $600 million deal with Apple, but at the same time the rest of the chip design firm's business is expected to show growth, a claim that investors seem to be happy about.
Apple is investing a total of $600 million to license patents, purchase assets and transfer employees from Dialog Semiconductor, a European chipmaker and existing business partner that entered Apple's supply chain with the first iPhones a decade ago.
The supplier responsible for the battery-saving power management chips inside Apple's iPhone has seen its shares bleed more than half their value in 2018 amid multiple reports that Apple is moving in its own direction.
The CEO of Dialog Semiconductor continued trying to assuage the concerns of investors this week, suggesting not only that the company has Apple contracts through 2020, but that it could have work on unannounced products beyond the iPhone, iPad, and Apple Watch.
Apple will continue to be a major customer of Dialog Semiconductor, the chip manufacturer's chief executive has claimed in an interview, insisting Dialog will continue supplying components for use in a number of Apple products until 2020, despite rumors that the iPhone producer may change how it sources some of its power management hardware.
As Apple continues its market expansion, it appears to be on the cusp of developing its own microprocessors as solutions to cost management and supplier constraints — and the subsequent fabricator abandonment that occurs as a result has profound repercussions those left behind.