Apple (AAPL) strengthens its in-house making capabilities of iPhones and iPads by investing $600 million in buying UK-based firm Dialog Semiconductor’s certain assets and 300 employees. Dialog, who is already a supplier to the iPhone maker, will receive $300 million in cash and Apple will pay another $300 million for the Dialog products that will be supplied in the next three years.
As per the agreement, Apple will buy certain assets, which include power management integrated circuits from Dialog. Also, over 300 employees of Dialog, which accounts to about 16% of its workforce, will support Apple’s future R&D. The tech giant will assume certain Dialog facilities in Italy, UK, and Germany.
In 2017, Dialog derived $1 billion of its revenue from its largest customer Apple, which accounts for over 75% of Dialog’s total revenue. Dialog’s 2018 revenue will not be affected by this agreement.
Dialog expects to start realizing revenue from Apple’s new contracts in 2019 and accelerating in 2020 and 2021. Dialog will supply power management, audio subsystem, charging and other mixed-signal ICs to the Cupertino-based tech behemoth.
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This deal is Apple’s major investment in an outside company in recent times. Last year-end, there were reports that Apple was in the process of designing power management ICs on its own. Dialog said that the proceeds from this transaction will be used to strengthen its balance sheet and growth opportunities across IoT, mobile, automotive and computing & storage markets.
This deal is targeted to close in the first six months of 2019, subject to regulatory approvals.
According to Techcrunch, Apple has also acquired a Denmark-based computer vision company Spektral recently. But it was not clear when this purchase actually happened. Spektral (formerly known as CloudCutout) was founded by Toke Jansen and Henrik Paltoft with the vision of becoming the standard software solution for removing the background of images.