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Apple signs $600 million deal to buy part of Dialog’s power-management chip business

Apple and Dialog have sealed a complex deal worth $600 million that includes licensing the chip makers power-management technology, hiring 300 of its employees, and a long-term purchasing agreement. In a press release this morning, Dialog confirmed terms of the deal. Apple will pay $300 million to Dialog, a supplier of power-management chips used in iPhones, which will give Apple licenses to Dialogs technology.  In addition, Apple will bring on board 300 of Dialogs engineers and take possession of several of its offices in Europe. Apple also agreed to spend $300 million purchasing Dialog chips over the next three years. This transaction reaffirms our long-standing relationship with Apple and demonstrates the value of the strong business and technologies we have built at Dialog, said Dialog CEO Jalal Bagherli in a statement. As Apple expands its portfolio of products, battery life and power management have become increasingly critical. But Apples increasing investment in developing its own chips has created growing uncertainly for many of its component suppliers, including Dialog. News of the deal sent Dialogs stock higher in trading.

Apple bets $600 million on improving Apple Watch, iPhone battery life

Apple's relationship with Dialog goes back many years, to the early iPhone days. Apple struck a huge deal that will push its chip-making ambitions forward. The tech giant agreed to pay $600 million in total to Dialog Semiconductor, a UK-based chipmaker that has been working with Apple since the first iPhones came out. That large amount of money will go toward two things: $300 million in cash pays for a portion of Dialog's company, including licensing power-management technologies, assets, and more than 300 employees who will now work for Apple. The company will pay the remaining $300 million to Dialog in advance for products to come out within the next three years. "Dialog has deep expertise in chip development, and we are thrilled to have this talented group of engineers whove long supported our products now working directly for Apple," Johny Srouji, Apples senior vice president of Hardware Technologies, said in a statement. Our relationship with Dialog goes all the way back to the early iPhones, and we look forward to continuing this long-standing relationship with them. The 300 Dialog engineers who will now be Apple employees have reportedly already been working closely with the company. Those folks will continue to work out of offices across Europe as Apple takes over some Dialog facilities in Italy, Germany, and the UK. Apple's acquisition of Dialog points to the company's seriousness in making its own chips, particularly for power management. Apple already makes chips found in its iPhones and iPads, but taking on more of the manufacturing process could help the company cut costs. Also, more efficient power-management chips could improve Apple devices like AirPods and the Apple Watch. While battery life is a big concern for all Apple devices, it's more pronounced in accessories like the wireless earbuds and the Watch, both of which are designed to work either all day or for multiple days at a time. With Dialog's technology and IP, Apple will likely be able to develop a better power-management chip than it could have on its own. After the acquisition, the remainder of Dialog's company will focus on the IoT, automotive, and computing and storage markets. The deal is expected to be finalized in early 2019, pending regulatory approval.