Imagination Tech Shares Plunge as Apple Ends Deal With British Firm

Shares in Imagination Technologies plunged by nearly 70 percent on Monday, after Apple informed the British firm that it plans to stop using its graphics technology in Apple consumer devices in up to two years' time.

Imagination said Apple had made the decision because the tech giant was developing its own independent graphics processing chips, which would reduce its reliance on the company.

imagination technologies logo
The news delivers a major blow to Imagination Technologies, which traditionally provides the PowerVR graphics architecture found in Apple's full range of iOS devices and receives a small royalty on every sale, which amounts to up to half of the British firm's revenue.

In a press release posted on the company's website, Imagination said it doubted that Apple could go it alone without violating Imagination' patents, intellectual property and confidential information.

Apple has used Imagination’s technology and intellectual property for many years. It has formed the basis of Graphics Processor Units ("GPUs") in Apple’s phones, tablets, iPods, TVs and watches. Apple has asserted that it has been working on a separate, independent graphics design in order to control its products and will be reducing its future reliance on Imagination’s technology.

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. This evidence has been requested by Imagination but Apple has declined to provide it.

The firm said that Apple's notification had triggered talks on alternative commercial arrangements for the current license and royalty agreement.

Apple has been a licensee and stakeholder in the company since at least 2008, and became a key investor in mid-2009 after raising its stake in the firm to 10 percent. Apple paid Imagination license fees and royalties totaling 60.7 million pounds for the year to end-April 2016 and is expected to pay about 65 million pounds for this year, Imagination said.

Late last year it was reported Apple was in "advanced talks" to acquire Imagination Tech after the British chip maker announced job cuts. Despite confirming the talks, Apple subsequently decided not to make a buyout offer, but several Imagination employees were recruited by Apple as part of its efforts to build an in-house graphics team.

Top Rated Comments

Nozuka Avatar
55 months ago
It should be much cheaper to buy them now..
Score: 48 Votes (Like | Disagree)
bollman Avatar
55 months ago
One can always argue it was a **** move of Apple to poach the employees and then leave the company to shrivel away, but it was of course way cheaper and we have no idea, perhaps the CEO was impossible to work with or something.

What is for sure though is that for every empty company carcass that Apple leaves behind after just eating them up and spitting out the remains, some companies might actually get second thoughts about working with Apple. Sure, in the short run, they might make loads of money, but in the long run, the companies might go belly up when Apple leaves them after poaching all the employees and knowledge.
It might actually hurt Apple that they seem very reluctant to buy companies they've worked with for years. Someday some company with vital technology might decline to work with Apple due to the risk of being "destroyed".
Score: 20 Votes (Like | Disagree)
btrach144 Avatar
55 months ago
It is unusual for Apple to make such a statement about its future plans since they're talking about a couple of years.
And I don't understand why they didn't buy the company since they have plenty of cash. If they're building a custom GPU from the ground up they're going to need a lot of expertise, since they are already stakeholder of Imagination why don't just buy more stocks and acquire the company with all its patents and employees?
They poached the employees instead. Way cheaper.

Is it a cheap shot? Yeah
Score: 18 Votes (Like | Disagree)
recoil80 Avatar
55 months ago
It is unusual for Apple to make such a statement about its future plans since they're talking about a couple of years.
And I don't understand why they didn't buy the company since they have plenty of cash. If they're building a custom GPU from the ground up they're going to need a lot of expertise, since they are already stakeholder of Imagination why don't just buy more stocks and acquire the company with all its patents and employees?
Score: 14 Votes (Like | Disagree)
Nozuka Avatar
55 months ago
Apple also makes their own CPU design, but they still have to pay for an ARM Architecture License.
I'm sure a deal like that could be made for a GPU design too. And Imagination is not the only player they can make such a deal with.

Imagination probably didn't give them as much control as they wanted.
Score: 10 Votes (Like | Disagree)
killawat Avatar
55 months ago
Wow, amazing drop with the stroke of a pen. Why pay for it when you can buy the talent?
Score: 9 Votes (Like | Disagree)

Top Stories

YouTube Picture in Picture Feature

YouTube Says iOS Picture-in-Picture Coming to All US Users

Friday June 18, 2021 9:41 am PDT by
After a long wait, YouTube for iOS is officially gaining picture-in-picture support, allowing all users, non-premium and premium subscribers, to close the YouTube app and continue watching their video in a small pop-up window. In a statement to MacRumors, YouTube says that picture-in-picture is currently rolling out to all premium subscribers on iOS and that a larger rollout to all US iOS...
Top Stories 63 Feature

Top Stories: Beats Studio Buds Announced, Apple Watch Series 7 Rumors, and More

Saturday June 19, 2021 6:00 am PDT by
The Apple news cycle started to move beyond WWDC this week, but that doesn't mean there still wasn't a lot to talk about, led by the official debut of the much-leaked Beats Studio Buds that might give us a hint of what to expect for the second-generation AirPods Pro. With no hardware announcements at WWDC, we also took a look at when we might finally see the long-rumored redesigned MacBook...
ios wifi settings

iOS Bug Causes Specific Network Name to Disable Wi-Fi on iPhones

Sunday June 20, 2021 4:15 am PDT by
A wireless network naming bug has been discovered in iOS that effectively disables an iPhone's ability to connect to Wi-Fi. Security researcher Carl Schou found that after joining a Wi-Fi network with the name "%p%s%s%s%s%n" his iPhone's Wi-Fi functionality was left "permanently disabled." Changing a hotspot's SSID did nothing to correct the problem, with even a reboot failing to make a...
maxresdefault

Video: 20 Annoyances Apple Fixed in iOS 15 and macOS Monterey

Friday June 18, 2021 11:36 am PDT by
With iOS 15 and macOS Monterey, Apple is adding several quality of life improvements, which are designed to address some of the complaints that people have had with these operating systems for years now. Subscribe to the MacRumors YouTube channel for more videos. In our latest YouTube video, we're highlighting some of our favorite "fix" features that address long-running problems in iOS and...
16 inch macbook pro m2 render

When Can We Expect the Redesigned MacBook Pros Now?

Wednesday June 16, 2021 7:11 am PDT by
With no sign of redesigned MacBook Pro models at this year's WWDC, when can customers expect the much-anticipated new models to launch? A number of reports, including investor notes from Morgan Stanley and Wedbush analysts, claimed that new MacBook Pro models would be coming during this year's WWDC. This did not happen, much to the disappointment of MacBook Pro fans, who have been...
space gray magic accessories trio

Apple Stops Selling Magic Accessories in Space Gray

Friday June 18, 2021 9:16 am PDT by
Apple this week stopped selling its Magic Keyboard with Numeric Keypad, Magic Mouse 2, and Magic Trackpad 2 accessories for the Mac in a Space Gray color, around three months after discontinuing the iMac Pro, which also came in Space Gray. Last month, Apple listed the Space Gray accessories as available while supplies last, and the company has now removed the product pages from its website...
m1 v intel thumb

Intel Processor Market Share May Fall to New Low Next Year Due to Apple Silicon

Friday June 18, 2021 2:06 am PDT by
Intel may see its market share fall to a new low next year, in large part thanks to Apple's decision to move away from using Intel processors in its Mac computers and instead use Apple silicon. Apple announced last year that it would embark on a two-year-long journey to transition all of its Mac computers, both desktops, and laptops, to use its own in-house processors. Apple is expected to...
3nm apple silicon feature

Apple Supplier TSMC Readies 3nm Chip Production for Second Half of 2022

Friday June 18, 2021 6:59 am PDT by
Apple supplier TSMC is preparing to produce 3nm chips in the second half of 2022, and in the coming months, the supplier will begin production of 4nm chips, according to a new report from DigiTimes. Apple had previously booked the initial capacity of TSMC's 4nm chip production for future Macs and more recently ordered TSMC to begin production of the A15 chip for the upcoming iPhone 13,...
2021 back t0 school

Apple Launches 2021 Back to School Promotion: Free AirPods With Eligible Mac or iPad Purchase

Thursday June 17, 2021 4:56 am PDT by
Apple today launched its seasonal back-to-school sale for the upcoming school year in the United States and Canada, offering students free AirPods alongside purchases of select Macs and iPad models. Similar to last year's promotion, this year's offer includes free AirPods alongside the purchase of a MacBook Air, MacBook Pro, the new 24-inch iMac, the Mac Pro, Mac mini, and the new M1-powered ...
applecare lower prices

Apple Lowers Prices of AppleCare+ Plans for M1 MacBook Air and MacBook Pro

Thursday June 17, 2021 7:33 am PDT by
Apple today lowered the prices of AppleCare+ plans for MacBook Air and 13-inch MacBook Pro models equipped with the M1 chip. Coverage offered by the plans, as well as accidental damage fees, appear to remain unchanged. In the United States, AppleCare+ for the MacBook Air now costs $199, down from $249. The new price applies to both M1 and Intel-based MacBook Air models, although Apple no...