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Apple inks $600M deal to acquire assets and talent from Dialog Semiconductor

133 points by tooltalk 8y ago

tooltalk 8y ago
so I guess Apple didn't want to acquire the entire company and all its ~1,900 employees?
- giancarlostoro 8y ago
  Probably, way better than buying them outright and firing the people they don't need.
- jetti 8y ago
  That would require Apple to acquire the company's liabilities as well. This way it is all up side.
- ksec 8y ago
  For a company worth $1B before the announcement, Apple paid $300M for 16% of their Staff and IP, and $300M for future order. For Dialog that is a much better deal than selling all of itself when Apple has not use for the other 80%.
  - hinkley 8y ago
    Relevant snippet from their wiki page: > Dialog Semiconductor is the exclusive designer of power management integrated circuits (PMICs) for the Apple iPhone, iPad, and Watch, which made up more than 70% of Dialog’s 2016 sales. Its share value halved from April to December 2017 after private bank Bankhaus Lampe changed its outlook for the company from “hold” to “sell” in the belief Apple would replace Dialog’s PMIC designs with its own... Take the money, get rid of the sword over your head, and keep working on your smart home tech with your new valuations and nobody yelling Frog and expecting you to jump. There are worse ways to run a medium sized company.
snops 8y ago
Apple taking the application processor business in house has gone very well, they currently have a substantial tech lead in the smart watch market due to their processor advantage over the outdated qualcomm most android devices are stuck with [1]. They have a similar (but smaller) advantage in phones, though that is also due to a very large die size as they can afford to spend more per product. Presumably they are looking at moving power management silicon in house as well to consolidate that advantage. At there scale, they will be getting custom silicon from Dialog already, but there's probably some comms/cost benefits to dealing with a department rather than an external company. https://arstechnica.com/gadgets/2018/09/review-googles-wear-os-2-0-cant-fix-its-obsolete-smartwatch-hardware/ https://arstechnica.com/gadgets/2018/09/review-googles-wear-...
- basch 8y ago
  It sounds a bit like the GT Advanced situation. Apple starts a relationship with a company, the deal becomes the VAST MAJORITY of the company's revenue, the company wants to get out of the buisness of being an apple supplier, because IF they scale to that size and lose a contract, they have huge cuts to make. So apple comes in, buys a substantial part of the company, and now the company can continue to operate without fear of downsizing. Any downsizing will be apples doing not theirs.
  - hinkley 8y ago
    When you get most of your money from one or two sources you aren’t really in control anymore. I can totally appreciate not wanting to be beholden to anyone. The last consulting firm I worked for had over 70% of their revenue coming from two contracts, and neither contract used any of the tools or philosophies the consulting company claimed to espouse. Ended up being the case that all the reasons I wanted to work there were just marketing messages and my sense of betrayal soured the relationship. That the guy in charge of developers left about a year after we parted ways... every time I think about those people I wonder if he knew it was all bullshit or if he just got tired of dealing with attitude from stressed out developers and never understood why they were pushing back.
SlowRobotAhead 8y ago
Glad I didn’t go with Dialog for a BLE chip. Kind of puts their line at risk for future development.
- btashton 8y ago
  They are really great chips for power consumption and price. I have used them in several products and the team behind them really knows what they are doing.
  - teddyh 8y ago
    Nothing of which have any relevance to the point on which you are commenting. The point was about future development, which you ignored completely.
    - btashton 8y ago
      They still list IoT and automotive as areas they are going to continue to develop. Bluetooth is such a large part of their business and fits into these areas, so I fail to see how they would leave that space. My comment is that they actually are very competitive in that area and I would not exclude them from new product development.
- GeekyBear 8y ago
  This article doesn't lay out which parts of the company are to be retained by Dialog, but I could swear an article I read yesterday listed Bluetooth chips as one of the areas where they would continue to develop their own product.
  - desdiv 8y ago
    >Dialog says post the acquisition, the remaining part of the business will focus more on IoT, as well as mobile, automotive, computing and storage markets, specifically as a provider of custom and configurable mixed-signal integrated circuit chips.
superpie 8y ago
This is pure speculation, but I wonder if this has anything to do with the AirPower wireless charging mat's development?
- nimish 8y ago
  Since the issue with wireless charging is power efficiency, having good power engineers onboard will likely help. That said, they are almost certainly buying them for the PMICs inside hardware devices first, and for accessories like AirPower second. But it's not a bad way to start shipping advanced power electronics like GaN, which dialog has chips for.
- giobox 8y ago
  Is AirPower, a fancy induction charger, really important enough to warrant a 600 million dollar investment? I suspect this is more likely iOS device related.
slivym 8y ago
Dialog used to sponsor a load of events in my department at uni, no one ever bothered telling us what they actually did, so it was always a bit comical, but now we know. I think the fact they're only acquiring the relevant part of the company is a fantastic move. It really shows apple is focused on what they're doing and not just buying their way into markets like Cisco or Intel.
samfisher83 8y ago
The MI band which uses their chip gets great battery life.
lawrenceyan 8y ago
I assume this is also heavily influenced by the recent Qualcomm court case where Apple was hit with infringing on one of their power management patents.

133 points by tooltalk 8y ago

tooltalk 8y ago

so I guess Apple didn't want to acquire the entire company and all its ~1,900 employees?

giancarlostoro 8y ago
Probably, way better than buying them outright and firing the people they don't need.
jetti 8y ago
That would require Apple to acquire the company's liabilities as well. This way it is all up side.
ksec 8y ago
For a company worth $1B before the announcement, Apple paid $300M for 16% of their Staff and IP, and $300M for future order. For Dialog that is a much better deal than selling all of itself when Apple has not use for the other 80%.
- hinkley 8y ago
  Relevant snippet from their wiki page: > Dialog Semiconductor is the exclusive designer of power management integrated circuits (PMICs) for the Apple iPhone, iPad, and Watch, which made up more than 70% of Dialog’s 2016 sales. Its share value halved from April to December 2017 after private bank Bankhaus Lampe changed its outlook for the company from “hold” to “sell” in the belief Apple would replace Dialog’s PMIC designs with its own... Take the money, get rid of the sword over your head, and keep working on your smart home tech with your new valuations and nobody yelling Frog and expecting you to jump. There are worse ways to run a medium sized company.

snops 8y ago

Apple taking the application processor business in house has gone very well, they currently have a substantial tech lead in the smart watch market due to their processor advantage over the outdated qualcomm most android devices are stuck with [1]. They have a similar (but smaller) advantage in phones, though that is also due to a very large die size as they can afford to spend more per product. Presumably they are looking at moving power management silicon in house as well to consolidate that advantage. At there scale, they will be getting custom silicon from Dialog already, but there's probably some comms/cost benefits to dealing with a department rather than an external company. https://arstechnica.com/gadgets/2018/09/review-googles-wear-os-2-0-cant-fix-its-obsolete-smartwatch-hardware/ https://arstechnica.com/gadgets/2018/09/review-googles-wear-...

basch 8y ago
It sounds a bit like the GT Advanced situation. Apple starts a relationship with a company, the deal becomes the VAST MAJORITY of the company's revenue, the company wants to get out of the buisness of being an apple supplier, because IF they scale to that size and lose a contract, they have huge cuts to make. So apple comes in, buys a substantial part of the company, and now the company can continue to operate without fear of downsizing. Any downsizing will be apples doing not theirs.
- hinkley 8y ago
  When you get most of your money from one or two sources you aren’t really in control anymore. I can totally appreciate not wanting to be beholden to anyone. The last consulting firm I worked for had over 70% of their revenue coming from two contracts, and neither contract used any of the tools or philosophies the consulting company claimed to espouse. Ended up being the case that all the reasons I wanted to work there were just marketing messages and my sense of betrayal soured the relationship. That the guy in charge of developers left about a year after we parted ways... every time I think about those people I wonder if he knew it was all bullshit or if he just got tired of dealing with attitude from stressed out developers and never understood why they were pushing back.

SlowRobotAhead 8y ago

Glad I didn’t go with Dialog for a BLE chip. Kind of puts their line at risk for future development.

btashton 8y ago
They are really great chips for power consumption and price. I have used them in several products and the team behind them really knows what they are doing.
- teddyh 8y ago
  Nothing of which have any relevance to the point on which you are commenting. The point was about future development, which you ignored completely.
  - btashton 8y ago
    They still list IoT and automotive as areas they are going to continue to develop. Bluetooth is such a large part of their business and fits into these areas, so I fail to see how they would leave that space. My comment is that they actually are very competitive in that area and I would not exclude them from new product development.
GeekyBear 8y ago
This article doesn't lay out which parts of the company are to be retained by Dialog, but I could swear an article I read yesterday listed Bluetooth chips as one of the areas where they would continue to develop their own product.
- desdiv 8y ago
  >Dialog says post the acquisition, the remaining part of the business will focus more on IoT, as well as mobile, automotive, computing and storage markets, specifically as a provider of custom and configurable mixed-signal integrated circuit chips.

superpie 8y ago

This is pure speculation, but I wonder if this has anything to do with the AirPower wireless charging mat's development?

nimish 8y ago
Since the issue with wireless charging is power efficiency, having good power engineers onboard will likely help. That said, they are almost certainly buying them for the PMICs inside hardware devices first, and for accessories like AirPower second. But it's not a bad way to start shipping advanced power electronics like GaN, which dialog has chips for.
giobox 8y ago
Is AirPower, a fancy induction charger, really important enough to warrant a 600 million dollar investment? I suspect this is more likely iOS device related.

slivym 8y ago

Dialog used to sponsor a load of events in my department at uni, no one ever bothered telling us what they actually did, so it was always a bit comical, but now we know. I think the fact they're only acquiring the relevant part of the company is a fantastic move. It really shows apple is focused on what they're doing and not just buying their way into markets like Cisco or Intel.

samfisher83 8y ago

The MI band which uses their chip gets great battery life.

lawrenceyan 8y ago

I assume this is also heavily influenced by the recent Qualcomm court case where Apple was hit with infringing on one of their power management patents.