AAPL dependence wreaks havoc

Harbinger for SWKS?

Shares in Imagination Tech (IMG.L) crashed more than 70 percent on Monday after the British company said its biggest customer, Apple (AAPL.O), would stop using its graphics technology in iPhones, iPads and Apple Watches.

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It’s always a red flag when one company is a very big customer, though Skyworks has been reducing its dependence on Apple.

What’s Apple’s alternative to using Skyworks chips?

With IMG’s graphics, Apple plans to replace them with in-house products they’re developing. IMG says that their patents would likely be infringed.

Can Apple develop cellphone RF chips in-house? I would think that’s even more esoteric than graphics systems. Is there even a second source for the chipsets that Skyworks makes? Apple would have to have a new design with a different chipset, and could lose the advantages that Skyworks offers.

The main thing is to see what the competition is like these days.

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Yes there is Ed and Apple went to the competition in one of its parallel designs for the US version of the iphone - no big deal. Designed out just like that. SWKS is the small kid on the block compared to their much larger competitors.

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Interesting (reassuring?) that Skyworks isn;t mentioned here:

Cirrus (CRUS) seems to be the most dependent on Apple for its business.

MF article on why Apple is moving to in-house graphics chip development:


The question is - would the same thing apply to the RF chips from Skyworks? Maybe in the future, but I don’t think there’s a risk now. Keep an eye on Apple’s hiring of engineers, I guess.