Apple supplier Dialog warns on sales as smartphone market stagnates

Apple supplier Dialog Semiconductor faced a slump on Monday, posting end of year revenues towards the lower end of its earlier predictions as the company grapples with lower appetite for Apple’s iPhones in the huge Chinese market. 

The UK-based semiconductor firm failed to reach the top end of its projections as its fourth quarter sales came in at $431m, highlighting the knock-on impact Apple’s dwindling sales are having on its supply chain.

At the end of October, Dialog estimated sales for the final three months of 2018 to come in at a range of $430m to $470. Estimations for Dialog’s preliminary revenue for last year are currently at $1.4bn.

Dialog specialises in the supply of key components such as integrated circuits and solid state lighting, a technology that makes use of LED lights.

The company has seen its shares face a bumpy few weeks after Apple slashed its revenue forecast following a slowdown in iPhone sales in China.

The smartphone maker’s revised outlook, which came after chief executive Tim Cook sent a letter to shareholders, has sent its market capitalisation tumbling to around $720.3bn despite having topped a $1tn valuation last year. 

Apple is planning to release a trio of cheaper new smartphones to combat sluggish sales.

However, Dialog’s results mark year-on-year revenue growth, which it attributes in part to strong sales in technologies around connectivity and new contribution from its acquisition of Silego Technology, a Silicon Valley-based chipmaker. The buyout deal was completed November 2017.

Shares in the company listed on the Frankfurt Stock Exchange first fell 2.3pc in pre-market trading but have since recovered.

The company will publish its finalised results for the year on 6th March and said that it remains “a highly cash generative business”.

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