Imagination Tech put up for sale in wake of Apple's decision to end graphics chip deal

[midian182]

Back in April, it was reported that UK chip designer Imagination Technologies' share price had fallen by nearly 70 percent after its biggest customer – Apple – announced plans to stop using the firm’s tech within the next two years. Today, Imagination announced it had put itself up for sale.

Apple’s licensing agreement with Imagination stretched back to at least 2008. The iPhone maker owns more than 8 percent of the firm that it almost acquired last year. Thanks to royalties from its PowerVR graphics architecture found in iOS devices, Imagination gets around half its revenue from Apple - the Cupertino company paid £60.7 million (around $75.88 million) in royalties to Imagination last year.

But Apple’s decision to turn to in-house GPU development means it plans to stop using Imagination’s tech within the “next 15 to 24 months.” The announcement saw the British firm’s value plummet, and it has struggled to recover from the blow, though today's news resulted in shares jumping 20 percent. Other Apple suppliers are also said to be feeling the pressure.

"Imagination Technologies announces that over the last few weeks it has received interest from a number of parties for a potential acquisition of the whole group," it said.

"The board of Imagination has therefore decided to initiate a formal sale process for the group and is engaged in preliminary discussions with potential bidders."

Apple could face a lawsuit over its decision to develop its own chips. In April, Imagination said: “Apple has not presented any evidence to substantiate its assertion that it will no longer require Imagination's technology, without violating Imagination's patents, intellectual property and confidential information.” Last month, Imagination revealed it had started a dispute resolution procedure with Apple.

Additionally, Imagination announced the sale of its MIPS and Ensigma businesses in May. The company has revealed that indicative proposals had been received for both businesses.

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https://www.techspot.com/news/69824-imagination-tech-put-up-sale-wake-apple-decision.html

 

[Squid Surprise]

In April, Imagination said: "Apple has not presented any evidence to substantiate its assertion that it will no longer require Imagination's technology, without violating Imagination's patents, intellectual property and confidential information."

While I'm not clear on the exact laws, since when do you have to prove that you don't need someone to make/sell something? If I own a Pizzeria and I've been buying pepperoni from a butcher for 10 years, and then decide - you know what, I'm going to start butchering my own pigs - I don't think the original butcher can sue me... I don't have to prove that I can get my own pepperoni elsewhere... if I can't, then I'm just doomed to be selling pepperoni-less pizza.

Now, if in the future, we find out that I'm actually stealing pepperoni from the butcher shop... then I can be sued...

So I don't see how Apple can be sued until AFTER it is PROVEN that they are using proprietary knowledge/patents in their new products... Which wouldn't be for about 2 years or more...

 

[mailpup]

Imagination is alleging there is no way Apple can make their own GPU without using Imagination tech which would be an infringement of their patents. The allegation would be a triable issue to be decided in court if it goes that far.

I'm guessing if Imagination waits for two years or whatever, it will be too late for them or any successor company as they will likely be out of business or at least considerably damaged. At that point Apple could conceivably acquire these patents for considerably less than they are worth today. I'm not saying Imagination will prevail in court but they need to bring up the issue now rather than later.

 

[mbrowne5061]

In April, Imagination said: "Apple has not presented any evidence to substantiate its assertion that it will no longer require Imagination's technology, without violating Imagination's patents, intellectual property and confidential information."

While I'm not clear on the exact laws, since when do you have to prove that you don't need someone to make/sell something? If I own a Pizzeria and I've been buying pepperoni from a butcher for 10 years, and then decide - you know what, I'm going to start butchering my own pigs - I don't think the original butcher can sue me... I don't have to prove that I can get my own pepperoni elsewhere... if I can't, then I'm just doomed to be selling pepperoni-less pizza.

Now, if in the future, we find out that I'm actually stealing pepperoni from the butcher shop... then I can be sued...

So I don't see how Apple can be sued until AFTER it is PROVEN that they are using proprietary knowledge/patents in their new products... Which wouldn't be for about 2 years or more...

Its not about the sausage but how you make it. If that butcher has a patent on the process or machine he uses to make his sausage - and suddenly you use an identical process or machine, without paying him for it, then you're in violation of the patent. But if you start making the sausage your own way, you're fine.

Its unclear if Apple has truly designed a new GPU, or if they are essentially just going to continue using the tech they were formally licensing from Imagination.

 

[Raoul Duke]

Perhaps Apple just wants to drive the price of the company down so they can buy it for a pittance. After all they paid them $75.88 million in royalties last year plus they own 8% of the company that they tried to acquire last year. Apple says they plan to stop using the tech in 15 to 24 months by which time they may own it. I'm sure Apple thinks this is "fair and reasonable'

 

[Jibberish18]

Welcome to the world of Apple. Every company that works with Apple eventually falls down will Apple rises. Not blaming Apple don't get me wrong, just a truth. I wonder if Samsung would want to buy?

 

[Skidmarksdeluxe]

Welcome to the world of Apple. Every company that works with Apple eventually falls down will Apple rises. Not blaming Apple don't get me wrong, just a truth. I wonder if Samsung would want to buy?

Samsung designs and manufacturers just about everything themselves, including the OS if you buy into Tizen, so I doubt they'd be interested in buying Imagination as a whole but could nab some of their soon-to-be-redundant employees.

 

[Jibberish18]

Samsung designs and manufacturers just about everything themselves, including the OS if you buy into Tizen, so I doubt they'd be interested in buying Imagination as a whole but could nab some of their soon-to-be-redundant employees.

But I thought their chipsets used the default ARM designed GPU?

Who else would want to nab them? Nintendo maybe? All phone companies use Snapdragons for simplification. Intel? I don't know.

 

[Squid Surprise]

Imagination is alleging there is no way Apple can make their own GPU without using Imagination tech which would be an infringement of their patents. The allegation would be a triable issue to be decided in court if it goes that far.

I'm guessing if Imagination waits for two years or whatever, it will be too late for them or any successor company as they will likely be out of business or at least considerably damaged. At that point Apple could conceivably acquire these patents for considerably less than they are worth today. I'm not saying Imagination will prevail in court but they need to bring up the issue now rather than later.

That's my point though.... Apple won't actually be using their own GPU for another 18-24 months.... so on what grounds can Imagination sue? There's no proof that Apple can or cannot make their own GPU until they actually do it... While you can sue anyone for anything, I don't see how this is winnable...

 

[Skidmarksdeluxe]

But I thought their chipsets used the default ARM designed GPU?

Who else would want to nab them? Nintendo maybe? All phone companies use Snapdragons for simplification. Intel? I don't know.

They have a cross licensing agreement with ARM in that they can use their architecture but can modify it to suit themselves. It's more complicated than that but that's it in a nutshell hence most of the world get the Exynos (Samsung) chipset in their Samsung devices. It's only North America and certain other markets where they'll use the Qualcomm SD.
BTW they also license the Exynos chipset to be used by other device manufacturers unlike Apple who hogs everything to themselves.

 

[mailpup]

That's my point though.... Apple won't actually be using their own GPU for another 18-24 months.... so on what grounds can Imagination sue? There's no proof that Apple can or cannot make their own GPU until they actually do it... While you can sue anyone for anything, I don't see how this is winnable...

My post was silent on the issue of who might win or lose any potential lawsuit. I was just giving an opinion as to why Imagination would sue now. Whether or not they even have a triable case has yet to be determined. After all, they haven't actually filed any lawsuit yet.