For quite a while now, there have been rumors that Apple (NASDAQ:AAPL) intends to cut out longtime power management chip supplier Dialog Semiconductor (NASDAQOTH:DLGNF) from future iPhones. 

Losing Apple's business would very likely sink Dialog's business, as the latter relies on the former for about three-quarters of its overall revenue. Dialog has made efforts to diversify its business, but it's extremely tough to replace 75% of your sales in a matter of a few years. 

Apple's iPhones in a mosaic pattern.

Image source: Apple.

Although Dialog Semiconductor management indicated late last year that it expected to supply Apple with power management chips for "2019-type products," it did caution that "Apple has the resources and capability to internally design a [power management integrated circuit] and could potentially do so in the next few years." 

In doing a routine perusal of its job boards, it now seems plain as day that Apple is indeed working on its own power management chips and likely intends to cut Dialog Semiconductor out in the foreseeable future. 

The evidence

On Feb. 28, Apple posted a job listing for a "PMIC Engineering Program Manager" (PMIC stands for "Power Management Integrated Circuit). 

From the listing: 

[We] are looking for strong technical leadership skills for ensuring that our Power Management IPs and chip designs meet the technical, quality and schedule requirements for Apple products. In this highly visible role the EPM is responsible for driving power management technology and IP/IC development working with analog and mixed signal design engineering, architecture, packaging, power integrity, system power engineering and Apple Product teams.

There are additional details in the listing, such as Apple's statement that the "ideal candidate [would] have project management experience in [integrated circuit] development," that make it quite clear that the company is building its own chip rather than working in concert with an external supplier (in other words, Dialog Semiconductor) to have a chip made for future Apple devices. 

Implications for Dialog, Apple

The implications for Dialog are quite dire; investors in the chipmaker should expect Apple to, sooner or later, design Dialog out of future iPhones and other devices. If (or, frankly, when) that happens, Dialog's revenue is set to plummet and it won't be entirely clear if Dialog will be able to find enough business to continue on as a stand-alone entity. 

Its fate seems destined to be similar to Imagination's -- it'll be bought relatively cheaply by a third party. 

As far as Apple goes, if it can throw more resources at building its own PMIC than Dialog could afford to, or if it can build a chip that's more tightly co-designed with other Apple-build components than Dialog was able to, then this could mean better, more power-efficient iPhones, iPads, Macs, and other products. 

Indeed, according to a source quoted by Nikkei Asian Review, one of the publications that reported on Apple's efforts to build its own power management chips, "Apple's new in-house power management chip would be the most advanced in the industry" and "could have processing capabilities that allow it to better monitor and control power consumption among various components." 

Ultimately, Apple wouldn't be taking power management chip development in-house if it didn't think it could deliver a measurable user experience improvement over what third-party solutions (even ones designed specifically for Apple) could. 

Ashraf Eassa has no position in any of the stocks mentioned. The Motley Fool owns shares of and recommends Apple. The Motley Fool has the following options: long January 2020 $150 calls on Apple and short January 2020 $155 calls on Apple. The Motley Fool has a disclosure policy.