Apple, which accounted for more than 70 percent of Dialog's 2016 sales by Lampe's estimates, is working on its own battery-saving chip for the iPhone that could replace Dialog's power management integrated circuits (PMIC) as early as 2019.
European shares fell on Tuesday as banks and tech stocks weighed, led lower by a slump in Dialog Semiconductor's shares, DLGS.DE though energy stocks provided support.
Unnamed industry sources, cited in Bankhaus Lampe's report, are said to have claimed that Apple will set up design centres to create the new technology in Munich and California.
The experts noticed that Apple has consistently procured engineers from the United Kingdom-based Dialog over the previous year, from the chip maker's pool of around 1,300 designers, yet a man acquainted with the circumstance noticed that it isn't unusual to see workers gravitating towards Apple and its provider. "They are poaching like insane", the person said. The worst-case scenario would be that Apple is that 21% customer and plans on dropping Synaptics soon, but Synaptics has a larger relationship with Samsung, so the 21% customer is probably the South Korean company.
Dialog has made several attempts to diversify beyond Apple and other smartphone customers in the past few years. If a battery doesn't fix the issue, then it means the problem is with the power management chips. iPhones have always been a high-end flagship phone, which costs a lot.
Synaptics was a supplier for Apple back in the iPod click wheel era, but Apple subsequently transitioned away, according to The Motley Fool. Imagination said in its statement last week that Apple "has asserted that it has been working on a separate, independent graphics design in order to control its products". It would let Apple "optimize power and performance with its internal graphics engine", for one.
Dialog, which supplies chips to Apple's iPhones and iPads, employs about 1,300 engineers, predominately in the United Kingdom.
The Apple operation has reached a size that is starting to represent a threat for Dialog, according to Iltgen, who believes that a complete shift to Apple's in-house development is unlikely in the short term. Net Net: we would buy the dip given the Company's visibility, which extends notably further than the 2017 version of the iPhone.