In what would become Apple’s biggest technology acquisition till date, and also the one which gives it uninterrupted access to a critical iPhone technology, Apple has announced acquisition of the technology that is at the heart of iPhone’s power management capability, for $600 Million. This technology acquisition deal with Dialog Semiconductor will also secure the German-listed company’s role as a supplier to the U.S. tech giant.
The deal includes acquisition of all patents currently owned by Dialog along with its current workforce. Prior to this, Apple’s most sizeable acquisition was that of PrimeSense back in 2013. PrimeSense manufacturer FaceID for Apple’s products.
Shares for Dialog shot up by over 34%, its single biggest gain since 2002 on the grounds of reduced dependency on Apple for revenues. Dialog saw its share reach critical levels initially in the year when Apple had announced plans for going ahead with a different supplier for its key components.
In a chat with Reuters, Dialog Chief Executive Jalal Bagherli says that he could now lead a “managed, smooth” transformation of the business as Dialog seeks new opportunities in areas such as the Internet of Things that includes connected devices like home speakers, fitness trackers or smart watches.
The sheer importance of such deals for companies manufacturing components for Apple, can be gauged from the fate of Imagination Technologies. The company was sold off to a China-backed fund, after its relationship ended with Apple.
Dialog on the other hand has had the deal at just the most opportune time. The company is already net cash positive at $525 Million, and the additional $600 Million (along with a workforce cut to 1800) will help it channelise money into generating revenues from non-Apple businesses.
Dialog said its 2018 revenue would not be affected and it would continue shipments of existing main power management integrated circuits (PMICs) to Apple. It expects to sell current and future generations of so-called sub-PMICs to Apple. Apple’s revenue share within the company will also go down to 30-40%, which currently stands at over 75%.
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