Apple has finalized a business agreement with Dialog Semiconductor to license its iPhone power management technology and transfer technical assets, in a deal worth $600 million.
As part of the agreement, Apple will acquire some of the Anglo-German chipmaker’s assets and 300 of its R&D staff, which is around 16 percent of Dialog’s workforce. Dialog’s shares rose as much as 34 percent on the news, their highest since 2002.
Announcing the deal on Thursday, Dialog said Apple would pay it $300 million in cash for the transaction and prepay a further $300 million for products to be delivered to Apple over the next three years. Commenting on the news, Apple SVP Johny Srouji told TechCrunch:
Dialog has deep expertise in chip development, and we are thrilled to have this talented group of engineers who’ve long supported our products now working directly for Apple. Our relationship with Dialog goes all the way back to the early iPhones, and we look forward to continuing this long-standing relationship with them.
Dialog shares took a tumble in late 2017 when the company admitted that Apple, its top customer, could build its own power management chips for future iPhones without the chipmaker’s help.
The admission came as a serious blow to Dialog, which exclusively designs the current main power management chip for iPhone, iPad, and Apple Watch models. Apple reportedly accounted for nearly three quarters of Dialog Semiconductor’s revenue in 2016.
However, today’s agreement gives Dialog time to reduce its dependence on Apple, which the chipmaker predicts will account for three-quarters of its sales over the course of this year.
Dialog CEO Jalal Bagherli told Reuters the chipmaker could now look forward to a “managed, smooth” transformation of the business as it seeks new opportunities for growth in other markets that could include home speakers, fitness trackers or smart watches.
The deal represents a huge investment for Apple, which will take over Dialog facilities in Italy, Germany, and the U.K., expanding its chip research and development significantly across Europe. Subject to regulatory approval, the deal is expected to close in the first half of 2019.
Discuss this article in our forums
Source From: macrumors.com.
Original article title: Apple Acquires iPhone Power Management Technology in 0 Million Deal With Chipmaker Dialog.
This full article can be read at: Apple Acquires iPhone Power Management Technology in 0 Million Deal With Chipmaker Dialog.