Apple may ditch Dialog, analyst says, hitting chipmaker’s shares

Bankhaus Lampe reduces its rating on German company to ‘sell’ from ‘hold’

Bankhaus Lampeas argued that Apple was working on its own battery-saving chip for the iPhone that could replace Dialog’s power management integrated circuits as early as 2019. Photograph: EPA

Dialog Semiconductor risks losing a crucial supply deal with Apple, according to a financial analyst who cut his rating on the stock on Tuesday, sending the Anglo-German chipmaker's shares down by as much as one-third.

Bankhaus Lampe reduced its rating on Dialog to “sell” from “hold” as it argued that Apple was working on its own battery-saving chip for the iPhone that could replace Dialog’s power management integrated circuits as early as 2019.

Apple accounted for more than 70 per cent of Dialog’s 2016 sales, analysts estimate. The German company says it is the world’s top maker of power management chips used in smartphones with roughly 20 per cent of the market.

Shares in Dialog fell as much as 36 per cent on Tuesday to a seven-month low. They had more than doubled in the second half of 2016 on rising expectations for the iPhone 8 due out later in 2017.

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Dialog said it saw no business reason for the share drop and that it remained comfortable with its financial outlook for “good revenue growth” in 2017, which would mark a recovery from a 12-per cent decline last year. – (Reuters)