Apple supplier Dialog Semi weathers iPhone slump to hit revenue target | HT Tech

Apple supplier Dialog Semi weathers iPhone slump to hit revenue target

Dialog struck a $600 million deal last October to transfer people and patents to Apple as part of a push to diversify its business.

By: REUTERS
| Updated on: Jan 15 2019, 16:43 IST
Around 75% of Dialog’s business is supplying power-management chips to Apple
Around 75% of Dialog’s business is supplying power-management chips to Apple (REUTERS)

Chip designer Dialog Semiconductor said on Monday that it managed to hit its fourth-quarter revenue guidance despite a slump in iPhone sales at its main customer Apple.

Shares in the Anglo-German company jumped 4%t as investors credited the company's resilience at a time when other Apple suppliers have slashed or missed their targets.

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The shares had fallen in early trade after Dialog said unaudited preliminary sales came in at $431 million in the fourth quarter, the low end of a guidance range of $430 million-$470 million, but they rebounded on the broader view that Dialog had weathered Apple's recent sales slowdown well.

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"Dialog was one of the few Apple suppliers not to warn, stating at the time their comfort with the guidance provided," said Barclays analysts in a note.

Around 75% of Dialog's business is supplying power-management chips to Apple, which warned in November of slow year-end sales and on January 3 issued its first sales warning in 12 years, blaming weaker iPhone sales in China.

Shares in suppliers have been hit as a result, with many forced to revise their guidance lower. Dialog, however, stood by its fourth-quarter revenue forecast and managed - just - to meet it.

 

CEO Jalal Bagherli said in November that Dialog was seeing less of an impact than other suppliers because its power-management chips were used across a broad range of Apple devices and not just in iPhones.

Dialog struck a $600 million deal last October to transfer people and patents to Apple as part of a push to diversify its business.

The company says the deal will buy it time to expand into new areas such as the Internet of Things that includes connected devices like home speakers, fitness trackers or smart watches.

The deal was not expected to affect revenues in 2018, but Dialog will lose out on Apple power chip deals going forward. The company, which will emerge smaller after the transaction, expects Apple to account for 35-40 % of revenues by 2022.

Dialog said its cash on hand was $678 million at the end of 2018, up $199 million year-on-year, and that it was debt-free. It will publish audited results for 2018 on March 6.

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First Published Date: 15 Jan, 16:43 IST
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