Apple

German Chipmaker Dialog’s growth: A Deal with Apple Could Result in an Uncertain Future

Apple, the hardware giant that governs the tech space nowadays, is in the news once again. The trillion-dollar company, best known for its Macbooks and iPhones, gets the edge over the industry by excellently integrating all its hardware to the custom-built software. Perhaps they wanted to further excel in the field that they joined hands with the German chipmaker, Dialog.

Apple and Dialog
Apple and Dialog
Photo credits: macobserver.com

The deal was finalised back in October of 2018, marking a 600 million dollar deal. This meant that about 75% of Dialog’s revenue was coming from Apple’s piggy, making the latter the formers biggest client. While Dialog had presumed a drop in their stock, much to everyone’s surprise, they ended up with a growth factor of about 4%.

This may seem like good news for the German manufacturer but according to reports by Reuters (an international news organization), grim times are to come. Perhaps that was a bit too dramatic, but after reading into the deal made by Apple, it seems quite possible. The deal allowed Apple to acquire much of their assets, including 300 of its research and development staff. Not to mention, a small chunk of their workforce was alotted to the tech giant as well. This means, and according to Apple’s reports as well, we could be seeing Apple manufacturing its power management integrated circuits.

Even the most common man would be able to analyse the fact that this would be bad for Dialog. If one was still confused, let us create a hypothetical. Imagine you owned a company that pioneers in growing oranges. Now carry that thought on to you selling most of your infrastructure (for a fee) to one of your biggest clients. Now imagine that client uses that infrastructure to grow oranges on its own. This means the client would not need you anymore, for oranges, that is. Furthering simplifying it, You are Dialog, and your Client is Apple. Yes, that is how bad it can be.

Either way, the German company would have to put its research into other directions and explore new fields if it wants to safeguard its survival. As we progress into 2019, their future would be unravelled.


Close