* Dialog acknowledges Apple could design its own power chips
* CEO in advanced technical talks with Apple on 2019 deals
* Company does not expect its 2018 Apple business to be hit
* Dialog shares fall as much as 19 percent (Adds CEO comments; details; background)
LONDON/FRANKFURT, Dec 4 (Reuters) - Dialog Semiconductor said on Monday top customer Apple could build its own power-management chips into future iPhones rather than rely on the Anglo-German chipmaker, sending its shares plunging as much as 19 percent.
The company, which analysts reckon derives more than half of its revenue from Apple, said there was no risk to its existing supply deals in 2018 and it was in the advanced stages of working with Apple on designing "2019-type products" that could lead to commercial contracts by next March.
"Our position remains that we have seen no material change to our ongoing relationship with Apple Inc," Chief Executive Jalal Bagherli told investors on a conference call.
However, the company acknowledged for the first time that "Apple has the resources and capability to internally design a PMIC and could potentially do so in the next few years."
PMICs are power-management integrated circuits that are vital to conserve battery life in products like Apple iPhones.
Investors are wary of companies that rely heavily on Apple, which has cut out several small suppliers in the past.
The U.S. technology giant said in April it planned to replace graphics chip supplier Imagination Technologies, sending its shares down 70 percent in a single session. Imagination was subsequently sold off in two separate deals.
The Nikkei business daily last week quoted one source as saying Apple would make about half the iPhone's power-management chips starting next year, with another source saying this could be delayed to 2019. (http://s.nikkei.com/2Al5nSl)
Since then, Dialog shares have lost nearly a third of their value. At 1035 GMT, they were down 15.2 percent at 26.47 euros.
Bagherli said Apple's feedback so far on 2019 product plans had been "very good" and that he expected to have more clarity by March on the terms of new business from Apple for 2019. Dialog would update investors when it had more details, he said.
Semiconductor suppliers are typically barred by Apple from revealing their supply relationships. Dialog, which has previously declined to name Apple, referring to it only obliquely as its "largest customer" or its "main business", said it had received a special dispensation from Apple to mention it.
Dialog emphasised it "does not have reason to believe its current expectations of 2018 Apple business would be impacted" should Apple decide to design the chips itself.
Dialog, itself heavily reliant on the smartphone industry, said it was aware that in order to remain a key supplier to Apple it would have to continue to meet the U.S. company's "technology, quality, price and volume expectations".
The slide in its shares echoed one in April, after Bankhaus Lampe analyst Karsten Iltgen advised investors to sell the stock because Apple was working on its own battery-saving chip. The stock is off more than 40 percent since then.
($1 = 0.8434 euros) (Additional reporting by Ludwig Burger in Frankfurt; Editing by Edmund Blair and Mark Potter)