By Dan Moren
October 11, 2018 11:14 AM PT
Apple makes deal with semiconductor firm Dialog
Warning: This story has not been updated in several years and may contain out-of-date information.
Just in case there were any doubt that Apple is serious about control of all the hardware inside its devices (and there really shouldn’t be, given its recent spats with Qualcomm and ditching of third-party graphics chip maker Imagination), Cupertino’s made a significant partnership with UK-based Dialog Semiconductor.
The partnership between Dialog and Apple is long-lived, with Dialog being the exclusive provider of power management chips in the iPhone, iPad, and Apple Watch. There were some indications that Apple might start building its own power management chips, but the answer seems to be more complex than that. Under this agreement, Apple licenses some of Dialog’s intellectual property relating to said power management technology, as well as acquiring some assets and 300 of Dialog’s employees (who have already worked closely with Apple). Dialog, meanwhile, gets not only $600 million, but also expands to building not only power management chips for Apple products, but also audio and charging chips as well.1
It’s an interesting move, and most immediately brings to mind Apple’s acquisition of chip firm P.A. Semi, back in 2008. But in that case, Apple bought P.A. Semi lock, stock, and barrel. There’s no doubt Apple could afford to do the same to Dialog, and reports say that Apple sales make up 70 percent of Dialog’s business. But Dialog employs 1500 people, roughly 10 times the number P.A. Semi did at its acquisition, and perhaps Apple didn’t want to take on that much personnel (or lay them off). It seems like Cupertino probably took exactly what it wanted from Dialog and paid handsomely for it.
Even if Apple doesn’t own Dialog outright, this does bring a lot more critical technology in house, further solidifying the company’s control of its entire product. That means even tighter integration throughout the phones, and potentially wins in terms of power management, device size, and efficiency. It continues to be a major competitive advantage for Apple over its competitors, which typically don’t exert this degree of control on its components.
It also continues speculation about the company bringing more of these hardware resources to bear on the Mac line, which has become the odd one out of Apple’s products, the only one still relying heavily on third-party hardware. The Dialog deal doesn’t point directly to any changes in the Mac line, but it does deepen Cupertino’s hardware bench, making it ever more plausible that the company will change the way it thinks about its PC devices.
- The press release also cites other “mixed-signal integrated circuits” as being part of the deal, which covers a wide variety of technologies. ↩
[Dan Moren is the East Coast Bureau Chief of Six Colors. You can find him on Twitter at @dmoren or reach him by email at firstname.lastname@example.org. The latest novel in his Galactic Cold War series of sci-fi space adventures, The Nova Incident, is available now.]
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