iPhone battery-saving chipmaker battered again on reports Apple loosening ties

AppleInsider

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.

In a conference call Dialog Semiconductor CEO Jalal Bagherli said that Apple hadn't offered an explanation for cutting back orders for power management chips, or identified the second supplier, according to Reuters. However, the executive claimed that it was likely that Apple itself was the new party.

Dialog said the change will slice 5 percent off of 2018 revenues, though they should still grow year-over-year. Analysts estimate that the company derives over half of its income from Apple orders.

Dialog's reveal of the supplier shift for the iPhone slashed 3.9 percent from Dialog's share price in Frankfurt trading. The company's stock has lost over half its value in the past year.

Apple has been rumored as working on its own power chips for some time now, much in the same way it designs some other key components like its A-series processors and W-series wireless chips. Power designs could help the company cut costs and improve battery efficiency, something critical as it moves into augmented and virtual reality headsets.

Reports have suggested that Apple could deploy it's own power chips as soon as 2018. Dialog, though, has tried to downplay fears, at one point claiming its 2018 sales wouldn't be affected, while admitting Apple was in a position to come out with a chip in "the next few years."

Thursday's news appears to contradict these earlier statements, and again casts Dialog's future in doubt. Bagherli has also claimed that Apple has ordered chips for 2019 and 2020 devices. If Apple power technology emerges this year, it's likely to spread rapidly across products reducing orders accordingly.

This fall's iPhones are typically predicted to include 5.8- and 6.5-inch OLED models, and a 6.1-inch LCD device. It's not clear which device will have the new power IC that the Dialog CEO is referring to.

lkrupp

Haven’t these companies learned by now that putting all your eggs in one basket of Apples is dangerous for their health? Relying on Apple as your sole source of revenue is not smart.

mattinoz

lkrupp said:

Haven’t these companies learned by now that putting all your eggs in one basket of Apples is dangerous for their health? Relying on Apple as your sole source of revenue is not smart.

If Apple is your major customer, best to start buy-out talks.

maestro64

Here we go another company is killed off by Apple. I wonder how many investors are losing money becaused they were following the Apple supply chain money.

entropys

maestro64 said:

Here we go another company is killed off by Apple. I wonder how many investors are losing money becaused they were following the Apple supply chain money.

To be fair, the company is only as big as it is now because of Apple. Thing is, if there is truth to the rumour, proudest risk management should have been diversifying its product and customer base for some time now. 
Essential business rule: don’t become dependent on one supplier, or one customer.

eg Samsung and screens, processors, qualcomm on radios.

foggyhill

lkrupp said:

Haven’t these companies learned by now that putting all your eggs in one basket of Apples is dangerous for their health? Relying on Apple as your sole source of revenue is not smart.

The funny thing is without Apple, they'd likely be 1/3 the size. Maybe their current size is unsustainable outside Apple as a client.

Better take this money and extend your product line to serve someone other than Apple cause one day, likely, Apple will decide to integrate your functionality into their core design and the money train will be gone.

[deleted user]

lkrupp said:

Haven’t these companies learned by now that putting all your eggs in one basket of Apples is dangerous for their health? Relying on Apple as your sole source of revenue is not smart.

You have to be a big established business with plenty other customers to be able to turn down a big player such as Apple. In some circumstances, the company may ONLY have ever dealt with Apple on a big scale so never had the resources nor inclination to source other business.

dick applebaum

Then there's this...

edited June 2018

gatorguy

dick applebaum said:

Funny link... 
 as long as you don't make the obvious connection. Lil'Abner, wow, blasting from the past? Same as it ever was.

How do you find this stuff?

macpro

entropys said:

maestro64 said:

Here we go another company is killed off by Apple. I wonder how many investors are losing money becaused they were following the Apple supply chain money.

To be fair, the company is only as big as it is now because of Apple. Thing is, if there is truth to the rumour, proudest risk management should have been diversifying its product and customer base for some time now. 
Essential business rule: don’t become dependent on one supplier, or one customer.

eg Samsung and screens, processors, qualcomm on radios.

Agreed.  There's a bit of common sense that relates to any form of success based on this sort of situation, simplistically put, don't up your life style on the assumption a single gravy train will continue forever.  If they'd planned accordingly they could have been sitting on a nice nest egg for their next life cycle whatever that may have been.

dick applebaum

MacPro said:

entropys said:

maestro64 said:

Here we go another company is killed off by Apple. I wonder how many investors are losing money becaused they were following the Apple supply chain money.

To be fair, the company is only as big as it is now because of Apple. Thing is, if there is truth to the rumour, proudest risk management should have been diversifying its product and customer base for some time now. 
Essential business rule: don’t become dependent on one supplier, or one customer.

eg Samsung and screens, processors, qualcomm on radios.

Agreed.  There's a bit of common sense that relates to any form of success based on this sort of situation, simplistically put, don't up your life style on the assumption a single gravy train will continue forever.  If they'd planned accordingly they could have been sitting on a nice nest egg for their next life cycle whatever that may have been.

Well said!

I headed a company that had both Apple and IBM as a supplier and as a customer... 

Make the most of it, but be wary not to become dependent.

macgui

foggyhill said:
The funny thing is without Apple, they'd likely be 1/3 the size. Maybe their current size is unsustainable outside Apple as a client.

Better take this money and extend your product line to serve someone other than Apple cause one day, likely, Apple will decide to integrate your functionality into their core design and the money train will be gone.

To be fair, a funnier thing is without Apple they'd be the same successful company they were before, without the fear that maybe by allowing Apple to become their biggest or sole customer, they would be over extended when Apple suddenly cut back on their orders.

So it's really a risk they agreed to take on. Apple has previously demonstrated that sure, they represent a great business opportunity, but don't expect a reacharound.

Another cautionary tale that may or may not be heeded by other companies in the future.