Apple decided to withdraw from partnership with
Imagination Technologies, the British company behind the graphics technology
used in its iOS devices, with Apple's decision to stop using Imagination's
intellectual property within two years prompting the UK firm's shares to plunge
in value by more than 60 percent.
imagination was advised before by Apple that it will
stop using the firm's intellectual property in new products in 15 months to two
years time, a statement from Imagination reveals. The change means a
significant reduction in revenue for Imagination, as it will not be eligible
for royalty payments under the current license and royalty agreement.
Apple's license fees and royalties represent
revenue of 60.7 million ($75.8 million) for the financial year 2015-2016 ,
Imagination advises, which are anticipated to rise to approximately 65 million
($81 million) for the year ending April 2017.
Apple's decision caused Imagination Technologies
Group PLC's share price to fall dramatically on the London stock exchange on
Monday. At the end of trading on Friday March 31, Imagination shares were
valued at 268.75p, but dropped down to just 84p shortly after the markets
opened on Monday morning.
At the time of publication, the share price has
risen slightly to 102.5p, but this still represents a drop of over 61 percent
from the end of the previous trading session.
Imagination is the creator of mobile graphics
processing architectures, most notably its PowerVR architecture, which is used
in a number of smartphones, tablets, and other compact devices. Apple uses the
company's architecture in many of its products, including iPhones, iPads, the
Apple TV, Apple Watch, and iPods.
Last month, Imagination revealed a
next-generation GPU architecture called PowerVR Furian, a power-efficient
architecture that will apparently better serve virtual reality and augmented
reality applications. The first GPU core variants based on Furian are likely to
be announced in mid-2017, with products using Furian GPUs potentially shipping
by the end of 2018.
The move away from Imagination may be part of
an attempt by Apple to take more control over the design of its hardware. Apple
was said to be in talks to acquire Imagination early last year, though
ultimately no such deal was made.
Apple has also taken time to poach a number of
Imagination's staff over the last two years, including GPU architects and
designers. These employees could help Apple to produce its own graphics
architecture, potentially saving it from having to pay royalty fees to
Imagination for using its intellectual property.
According to Imagination's statement, Apple has
asserted that it has been "working on a separate, independent graphics
design in order to control its products."
Imagination is also seemingly suggesting there
could be a legal fight in the future over the in-house graphics architecture
move, declaring 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 evidence has been requested by Imagination, Apple has
declined to provide any to the company.
Imagination believes that it would be extremely challenging to design a brand new GPU architecture from basics without infringing its intellectual property rights, so in the statement about the matter, Imagination does not accept Apple's assertions. The company has also attempted to discuss potential alternative commercial arrangements with Apple for the current license and royalty agreement
No comments:
Post a Comment