Ailing Brit chip designer Imagination Technologies up for sale Trouble struck British chip designer Imagination Technologies has confirmed it is for sale amid an ongoing dispute with Apple that has crushed its valuation on the London Stock Exchange. The firm’s share price went into freefall on 3 April after it revealed that Apple, which accounts for circa half of its sales, was to stop …
How is it market manipulation to tell a company you will no longer be needing their products? Just because Apple has used their GPU technology in the past, doesn't mean they are obligated to use it forever. Their contract no doubt specifies some notice period for a material change, which Apple provided. They didn't announce it to the public and crash the stock, it was when Imagination announced it (as required by regulations) that the price dropped.
If Apple buys them, it will only be for their patents - to protect them against potential lawsuits from someone else buying Imagination and/or from other companies like a lot of GPU IP like Nvidia or AMD.
@DougS Imagine a Chinese firm bought in the chips, examined them and saw how it worked, pushed out other customers and then said thanks but we'll start producing our own version now and we pinky promise it won't infringe on your IP. Would your post have been as blaise about Apple's conduct then?
One major customer called Apple...
Anyone remember an outfit called GT Advanced Technologies? Apparently they were going to be making sapphire glass for Apple, but the business on it, only for Apple to walk away at the last minute and they went bust. Some parallels to this case I think.
I know Apple are the biggest player are in town, but they can't keep driving their suppliers to the wall. Apple can't do everything for themselves, they rely on other companies to do an awful lot for them. Many large suppliers will be thinking, don't get involved with Apple, not at any price. What if, say, Foxconn decide it's better in the long run to do business with Huawei instead of Apple?
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So Imagination lost some 60 millions last year when Apple during the same period was making money selling millions of shiny toys, each of them using a gpu based on Imagination's technology... Aren't they paid per unit produced, or is it that they get paid peanuts.
Someone help me understand pls.
They lost 6 million, not 60 million. The 60 million was their revenue. Apple pays whatever the contract says they should. All we know is that Apple is nearly 70% of their revenue, a risky situation for any company to be so dependent on one customer. If Imagination had been able to get other customers they'd be fine, but pretty much the whole Android market is buying SoCs using other GPUs.
Imagination is in other businesses like MIPS etc. that may be responsible for those losses.
Apple did pay Imagination for their IP. If they hadn't the case would have been in the courts well before now.
Perhaps the financial loss that Imagination had was down to the BOD agreeing to work on 'stuff' that didn't work out? Remember that they also owned MIPS at the time.
There is a dispute between IM and Apple but that seems to be going through the process that was agreed in the contract.
If IM's only real customer was Apple then the business was always going to be at risk of either a downturn in the Apple iPhone business and/or Apple giving notice to end the contract (as probably allowed for in the contract).
Perhaps the IM BOD wanted to keep the Apple gravy train going and didn't plan for a future without Apple as a major customer?
There are a number of scenarios that can lead you to where IM is today and not all of them involve/blame Apple even though that is SOP around here. (eg DRAM shortage? Blame Apple).
It will all play out over the coming months.
Imagination is/was the parent of VideoLogic who, apart from making nice add-on VGA card for PCs in the late 1990's, also designed the internals for the Sega DreamCast, which brought them some nice royalty cheques. Likewise, their Ensigma section designed the SoC for DAB radios, of which many firms licence the tech. So, IM's main interest is selling IP rights, based on their designs.
With Apple going in another direction, it'll be interesting to see who would want to buy IM's patent portfolio as well as their design teams.
Though personally, I think it's just the "might" of Apple wanting to buy in the tech cheap by forcing IM to consider its future. With a cheaper share price, the value of IM is chicken feed compared to Apples revenues.
Be realistic. Every company on the planet would be happy to accept the Cook's Shilling. You then work your arse off meeting the logistics requirements while (if you're smart) background planning for the day the orders dry up. I do not know (anything) about IM but each Apple supplier - Foxconn included - would in turn put the almighty squeeze on its own suppliers and sub-contractors. If this is how IM operated and a raft of their sub-contractors go bust, nobody in IM is going to cry for them.
I do not know (anything) about IM
So why are you writing about them then?
IM made a lot of money from its work for Apple. It just failed to get enough other customers. Pissing off ARM was one of the main reasons for this because it directly led to ARM designing its own GPU cores (Mali) and offering them with the CPUs.
But this is just the realities of tooth-and-claw business practices. IM have to achieve the greatest return on shareholder's investment and if that means shutting up shop and selling off the various assets then that's what they have to do.
Funny to consider if this happened to a French, German or Dutch company of similar size, would the EU intervene to save them? Then again if it was based in the central EU perhaps it would have grown a bit bigger than it is/was.
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