iPhone Chipmaker Dialog Reports Low Sales Projection for Fourth Quarter

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Apple supplier Dialog Semiconductor reported on Monday that its projected sales for the fourth quarter of 2018 would be at the low end of its original target (via CNET).


The German chipmaker, whose partnership with Apple makes up around 75 percent of its revenue, said its preliminary revenue for Q4 2018 was approximately $431 million. That figure only just falls into the guidance range of $430 million to $470 million the company reported in October.

The news comes just two weeks after Apple lowered its own revenue guidance by up to $9 billion for the first quarter of its 2019 fiscal year.

Apple CEO Tim Cook offered up a number of explanations for the decline, including the timing of the iPhone XS, XS Max, and XR launch compared to the timing of the iPhone X launch last year, a slowing Chinese economy, and the company's $29 battery replacement program, all of which led to fewer iPhone upgrades than expected.

Last October, Apple agreed to a business arrangement with Dialog to license its iPhone power management technology and transfer technical assets, in a deal worth $600 million. Dialog's shares rose as much as 34 percent on the news, their highest since 2002.

As part of the agreement, Apple acquired some of the Anglo-German chipmaker's assets and 300 of its R&D staff, or around 16 percent of Dialog's workforce. 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.

The agreement followed a report earlier the same month claiming Apple would design its own power management chips as early as 2018, which came as a serious blow for Dialog, the exclusive designer of the current main power management chip for iPhone, iPad, and Apple Watch models.

Dialog's shares initially dropped on news of today's revenue projection, but then climbed in German trading, according to the Financial Times. The company was recently up 2.5 percent, cutting its 12-month loss to roughly 10 percent, said the paper.

Tag: Dialog

Top Rated Comments

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24 months ago
I think Cook's hubris and misjudging the iPhone's price elasticity (people are less and less willing to spend > 1,000 for a phone every year), is catching up to him. They were all in on the iDevices to the detriment of the Mac line that they're scrambling now to roll out new machines, yet marketshare is decreasing in that sector for them as well.
Score: 6 Votes (Like | Disagree)
Avatar
24 months ago

People buy phones less often, so the solution is to increase the price of the phones, ending in the same economical outcome.

I think that move is purely short term, yse they're making profits, but at the expense of future sales. They can't keep raising the price to make up for less units sold, and that's my point. They misjudged the price elasticity, more so in other countries. They're wanting to sell phones in india but near the same price point, yet few people are buying them, because many people just don't have that much discretionary income to justify that high price.
Score: 5 Votes (Like | Disagree)
Avatar
23 months ago

Have to disagree...
The CEO doesn't have anything to do with that.

A) The CEO takes credit when things are good that are beyond their control so it's fair that the reverse is true.

B) Cook makes millions and millions of dollars so he should be held to a vey high standard. Including looking for additional revenue sources beyond the iPhone.

If the CEO doesn't matter, let's pay some random MBA $100K to keep the seat warm and pass the savings onto the shareholders.
Score: 4 Votes (Like | Disagree)
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24 months ago
The only person who doesn’t know why is Mr Cook. Apple needs new CEO.
Score: 4 Votes (Like | Disagree)
Avatar
23 months ago

Have to disagree. Peak smartphone sales were in 2016. Although delayed (Apple kept increasing their sales after that), that peak might have something to do with it. The smartphone market is saturated and people are hanging onto them longer - just as occured in the PC market years ago.

The CEO doesn't have anything to do with that.



The Xr ($749) is $50 cheaper than the 8 Plus was last year. Why the $1300?

Because the poster doesn’t want something that barely above 720p resolution? Just a guess
Score: 2 Votes (Like | Disagree)
Avatar
24 months ago

The only person who doesn’t know why is Mr Cook. Apple needs new CEO.

Have to disagree. Peak smartphone sales were in 2016. Although delayed (Apple kept increasing their sales after that), that peak might have something to do with it. The smartphone market is saturated and people are hanging onto them longer - just as occured in the PC market years ago.

The CEO doesn't have anything to do with that.

I need a new iPhone.
I’m not buying one bc I’m not down to spend $1300 on an iPhone...

The Xr ($749) is $50 cheaper than the 8 Plus was last year. Why the $1300?
Score: 2 Votes (Like | Disagree)

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