Dialog Semiconductor has finalized a $600 million agreement with Apple to reduce reliance on the tech giant, which previously accounted for 75% of its revenue, according to CEO Jalal Bagherli. The transaction, completed in October 2018, involves transferring a programming team and patents to Apple, positioning the chipmaker to focus on emerging markets like connected health devices and gaming console power solutions.
The deal is expected to provide Dialog with capital to transition toward a more diversified business model. Bagherli highlighted partnerships with four pharmaceutical companies for remote patient monitoring systems and two gaming firms developing next-generation consoles, emphasizing growth in the Internet of Things sector driven by 5G network expansion.
Dialog's stock surged over 5% in midday trading, bucking broader semiconductor industry trends. The company anticipates 2019 revenue growth, particularly in the second half, despite a projected single-digit revenue decline for the year. Analysts at Barclays noted the transformation carries risks but acknowledged potential value in the revised business strategy.
Connected Health Innovations ¶
The firm's health-focused initiatives include devices for continuous glucose monitoring, blood pressure tracking, and insulin delivery systems. These solutions aim to reduce hospital visits through remote patient management, aligning with global healthcare digitization efforts.
Strategic Investments ¶
Bagherli outlined plans to allocate proceeds from the Apple deal toward acquisitions in IoT connectivity, including narrowband radio and WiFi technologies. A follow-up to the 2017 Silego acquisition is also under consideration to strengthen Dialog's mixed-signal integrated circuit capabilities.
Despite a 13% decline in mobile sales during Q4 2018, other divisions reported a 20% revenue increase, partially attributed to the Silego integration. The company posted a 2% rise in fourth-quarter operating profits, though revenues fell 7% year-over-year.
