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Analysts like to closely track and talk up chipmakers who win Apple slots. After all, it has massive impact on business - for a while (same is true for Samsung by the way). But the downside is equally dramatic. Recently IMG stock plunged after news confirming they were designed out. Looks like Dialog is next up to walk the plank.
The stock market over-reacted to this news, because nothing changes between Apple and Dialog until at least 2018. I would expect Dialog Semi stock to recover in the coming weeks when cooler thinking returns.
If you look at the iPhone tear downs over the last few years you will see that Apple is integrating more capabilities into their SoC so the chip count changes quite a bit. Most people think this is to get better margins but I think it is all about control. Apple called it controlling the "customer experience" but I think security is another compelling reason to design your own chips. Aart de Geus mentioned it at the CEO panel last week. If a systems company asks a chip vendor for a security indemnification the answer of course is no, I mean how could they?
LGNF) | Seeking Alpha
