Another important Apple technology partner is losing staff to Apple

  • Apple is hiring staff away from Dialog Semiconductor, a British chip firm which supplies power management chips for the iPhone and iPad.
  • Dialog's shares crashed over the weekend after a report that Apple would bring some chip design capabilities in-house in 2018.
  • The situation bears resemblances to Imagination Technologies, another British chip company which was sold after losing its contract with Apple.
  • Dialog has acknowledged Apple could design its own chip internally but said there was no indication this would happen any time soon.


Apple is continuing to hire away designers and engineers from one of its most important suppliers, British chip firm Dialog Semiconductor, which is currently fighting to persuade investors that its agreement with Apple is safe.

According to Business Insider's analysis of LinkedIn profiles, around 28 Dialog engineers and designers have moved to Apple between March 2016 and now — something analysts have described as a "brain drain." Apple is Dialog's biggest customer, reportedly accounting for half of its revenue.

Salaries of employees at 25 top tech companies:

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Salaries of employees at 25 top tech companies
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Salaries of employees at 25 top tech companies

Google

Average annual bonus: $32,478

Average sign-on bonus: $27,547

Average annual base salary: $136,000

Netflix

Average annual bonus: $0

Average sign-on bonus: $3,520

Average annual base salary: $206,000

Twitter

Average annual bonus: $120

Average sign-on bonus: $26,144

Average annual base salary: $149,000

Apple

Average annual bonus: $20,298

Average sign-on bonus: $27,201

Average annual base salary: $102,000

Facebook

Average annual bonus: $33,225

Average sign-on bonus: $45,708

Average annual base salary: $145,000

Oculus VR

Average annual bonus: $395

Average sign-on bonus: $6,926

Average annual base salary: $119,000

Amazon

Average annual bonus: $24,732

Average sign-on bonus: $41,340

Average annual base salary: $118,000

Square

Average annual bonus: $988

Average sign-on bonus: $17,996

Average annual base salary: $134,000

Uber

Average annual bonus: $31,633

Average sign-on bonus: $1,807

Average annual base salary: $117,000

Pinterest 

Average annual bonus: $4,374

Average sign-on bonus: $33,376

Average annual base salary: $151,000

Tesla

Average annual bonus: $4,779

Average sign-on bonus: $19,447

Average annual base salary: $105,000

UnitedHealth Group

Average annual bonus: $7,280

Average sign-on bonus: $118

Average annual base salary: $87,000

Snap Inc.

Average annual bonus: $10,588

Average sign-on bonus: $23,705

Average annual base salary: $127,000

Hewlett Packard Enterprise Co.

Average annual bonus: $10,756

Average sign-on bonus: $8,265

Average annual base salary: $131,000

CSRA

Average annual bonus: $13,732

Average sign-on bonus: $1,186

Average annual base salary: $100,000

credit: Facebook

Capital One

Average annual bonus: $15,114

Average sign-on bonus: $8,568

Average annual base salary: $107,000

Fitbit

Average annual bonus: $18,069

Average sign-on bonus: $25,459

Average annual base salary: $128,000

Pandora

Average annual bonus: $22,316

Average sign-on bonus: $18,886

Average annual base salary: $109,000

Microsoft 

Average annual bonus: $23,224

Average sign-on bonus: $20,191

Average annual base salary: $179,000

Airbnb

Average annual bonus: $23,250

Average sign-on bonus: $23,250

Average annual base salary: $124,000

Arista Networks

Average annual bonus: $27,497

Average sign-on bonus: $18,652

Average annual base salary: $151,000

credit: Facebook

Linkedin

Average annual bonus: $32,216

Average sign-on bonus: $25,418

Average annual base salary: $149,000

Dropbox

Average annual bonus: $32,707

Average sign-on bonus: $32,833

Average annual base salary: $144,000

VMware

Average annual bonus: $33,145

Average sign-on bonus: $18,851

Average annual base salary: $147,000

Salesforce

Average annual bonus: $39,959

Average sign-on bonus: $28,314

Average annual base salary: $142,000

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Bankhaus Lampe analyst Karsten Iltgen first spotted the flow of staff between Dialog and Apple in April this year, and concluded in a note to investors that the iPhone maker was working on its own power management chips, denting Dialog's share price.

Dialog's situation bore similarities with that of Imagination Technologies, another British chip supplier which was hurriedly sold off in September after losing its contract with Apple. Prior to its sell-off, Imagination also suffered a brain drain to Apple, though a spokesman described this as normal at the time.

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Dialog declined to comment. A source close to the firm said the attrition rate was better than usual, and that Apple hired designers and engineers for its Munich design centre from several firms, including Dialog.

Dialog's share price crashed again over the weekend after a Nikkei report suggested Apple would design its own power management chip for the iPhone as early as next year. That prompted Dialog's chief executive Jalal Bagherli to acknowledge for the first time that Apple had the capability to design a power management chip internally, but that there were no outward signs it planned to do so in 2018. He said the firm wouldn't know about its agreements with Apple for 2019 for another few months.

Dialog's share price stands at €24.81, down 36% from €38.70 a week ago.

Apple CEO Tim Cook:

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Tim Cook
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Tim Cook
Apple CEO Tim Cook attends the opening ceremony of the fourth World Internet Conference in Wuzhen, Zhejiang province, China, December 3, 2017. REUTERS/Aly Song
Nov 25, 2017; Auburn, AL, USA; Apple chief executive officer Tim Cook arrives for College GameDay before the game between the Auburn Tigers and the Alabama Crimson Tide at Jordan-Hare Stadium. Mandatory Credit: Christopher Hanewinckel-USA TODAY Sports
Apple CEO Tim Cook speaks at The Bloomberg Global Business Forum in New York, U.S., September 20, 2017. REUTERS/Brendan McDermid
Apple CEO Tim Cook (R) plays with an iPhone as Jonathan Ive, Apple's Chief Design Officer, looks on during a launch event in Cupertino, California, U.S. September 12, 2017. REUTERS/Stephen Lam
Apple CEO Tim Cook speaks during Commencement Exercises at Massachusetts Institute of Technology (MIT) in Cambridge, Massachusetts, U.S., June 9, 2017. REUTERS/Brian Snyder
Apple CEO Tim Cook smiles as he arrives to a product demo during the annual Apple Worldwide Developer Conference (WWDC) in San Jose, California, U.S. June 5, 2017. REUTERS/Stephen Lam
Tim Cook, CEO, speaks during Apple's annual world wide developer conference (WWDC) in San Jose, California, U.S. June 5, 2017. REUTERS/Stephen Lam
Apple CEO Tim Cook attends the China Development Forum in Beijing, China, March 18, 2017. REUTERS/Thomas Peter
Apple Inc CEO Tim Cook waves during an Apple media event in San Francisco, California, U.S. September 7, 2016. REUTERS/Beck Diefenbach
Apple Inc CEO Tim Cook makes his closing remarks during an Apple media event in San Francisco, California, U.S. September 7, 2016. REUTERS/Beck Diefenbach
Apple CEO Tim Cook speaks during an event at the Apple headquarters in Cupertino, California March 21, 2016. REUTERS/Stephen Lam
Apple Chief Executive Officer Tim Cook speaks during a event for students to learn to write computer code at the Apple store in the Manhattan borough of New York December 9, 2015. REUTERS/Carlo Allegri
Apple CEO Tim Cook speaks during the Wall Street Journal Digital Live ( WSJDLive ) conference at the Montage hotline Laguna Beach, California October 19, 2015. REUTERS/Mike Blake
Apple CEO Tim Cook introduces the new iPad Pro during an Apple media event in San Francisco, California, September 9, 2015. Reuters/Beck Diefenbach
Apple CEO Tim Cook delivers his keynote address at the Worldwide Developers Conference in San Francisco, California June 8, 2015. REUTERS/Robert Galbraith
PALO ALTO, CA - NOVEMBER 03: Apple CEO Tim Cook looks on as the new iPhone X goes on sale at an Apple Store on November 3, 2017 in Palo Alto, California. The highly anticipated iPhone X went on sale around the world today. (Photo by Justin Sullivan/Getty Images)
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CHICAGO, IL - OCTOBER 20: Apple CEO Tim Cook greets guests at the grand opening of Apple's Chicago flagship store on Michigan Avenue October 20, 2017 in Chicago, Illinois. The glass-sided store sits on shore of the Chicago River in the city's downtown. (Photo by Scott Olson/Getty Images)
Tim Cook, chief executive officer of Apple Inc., speaks during the Bloomberg Global Business Forum in New York, U.S., on Wednesday, Sept. 20, 2017. The forum, hosted during UN General Assembly week, brings leaders to work together, through on-the-record main stage discussions and private bilateral and multilateral meetings, to address the most pressing economic issues facing us today. Photographer: Misha Friedman/Bloomberg via Getty Images
CUPERTINO, CA - SEPTEMBER 12: Apple CEO Tim Cook (R) and Apple chief design officer Jonathan Ive (L) look at the new Apple iPhone X during an Apple special event at the Steve Jobs Theatre on the Apple Park campus on September 12, 2017 in Cupertino, California. Apple held their first special event at the new Apple Park campus where they announced the new iPhone 8, iPhone X and the Apple Watch Series 3. (Photo by Justin Sullivan/Getty Images)
Apple CEO Tim Cook speaks during a media event at Apple's new headquarters where Apple is expected to announce a new iPhone and other products in Cupertino, California on September 12, 2017. / AFP PHOTO / Josh Edelson (Photo credit should read JOSH EDELSON/AFP/Getty Images)
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BOSTON, MA - JUNE 09: CEO of Apple Tim Cook looks on before a game between the Boston Red Sox and the Detroit Tigers at Fenway Park on June 9, 2017 in Boston, Massachusetts. (Photo by Adam Glanzman/Getty Images)
CAMBRIDGE, MA - JUNE 9: Apple CEO Tim Cook delivers the commencement address during the Massachusetts Institute of Technology Commencement at Killian Court on the MIT campus in Cambridge, MA on Jun. 9, 2017. (Photo by John Tlumacki/The Boston Globe via Getty Images)
BOSTON, MA - JUNE 9: Apple CEO Tim Cook reacts before a game between the Boston Red Sox and the Detroit Tigers on June 9, 2017 at Fenway Park in Boston, Massachusetts. (Photo by Billie Weiss/Boston Red Sox/Getty Images)
Tim Cook, chief executive officer of Apple Inc., speaks during a Bloomberg Technology television interview at the Apple Worldwide Developers Conference (WWDC) in San Jose, California, U.S., on Monday, June 5, 2017. Cook�said the company has helped U.K. officials investigate terror attacks, while reiterating his dismay over U.S. plans to quit the Paris agreement on climate change. Photographer: David Paul Morris/Bloomberg via Getty Images
SAN JOSE, CA - JUNE 05: Apple CEO Tim Cook delivers the opening keynote address the 2017 Apple Worldwide Developer Conference (WWDC) at the San Jose Convention Center on June 5, 2017 in San Jose, California. Apple CEO Tim Cook kicked off the five-day WWDC that runs through June 9. (Photo by Justin Sullivan/Getty Images)
Apple CEO Tim Cook looks on during a visit of the shopfitting company Dula that delivers tables for Apple stores worldwide in Vreden, western Germany, on February 7, 2017. / AFP / dpa / Bernd Thissen / Germany OUT (Photo credit should read BERND THISSEN/AFP/Getty Images)
CUPERTINO, CA - OCTOBER 27: Apple CEO Tim Cook smiles during a product launch event on October 27, 2016 in Cupertino, California. Apple Inc. unveiled the latest iterations of its MacBook Pro line of laptops and TV app. (Photo by Stephen Lam/Getty Images)
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Some analysts remain alarmed about the so-called brain drain and Dialog's future revenues.

"This is a major disaster," Hauck & Aufhauser Tim Wunderlich told CNN on Monday. "I would expect Dialog to experience declining sales from 2019 onward, intensifying gross margin pressure, (and) brain drain as uncertainties make the company a far less appealing employer for top talent."

And Bankhaus' Iltgen, who originally spotted the trend, told Business Insider: "Yesterday's release and [conference call] marks a full u-turn in communication strategy. The company is essentially confirming everything which we had written before — and which they denied so far. Management provably lost credibility with many investors. This will take time to rebuild."

Iltgen suggested that Dialog would maintain a relationship with Apple, but would no longer be the "single source" for power management chips.

Not everyone is so pessimistic. In a Monday note, Morgan Stanley analysts said Dialog's revenues for 2018 and most of 2019 were safe, contrary to the Nikkei report.

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See Also:

SEE ALSO: iPhone chip supplier Dialog is planning for 'several scenarios' after admitting Apple could bring design in-house

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