“Apple’s announcement to ditch the graphics chips designed by Imagination Technologies (IMG) and the subsequent share price collapse that followed could leave the door open for the U.S. giant to acquire the British firm, investment bank Jefferies said in a note on Tuesday,” Arjun Kharpal reports for CNBC.
“Imagination Technologies design graphics processing units (GPU), which are key components in Apple products allowing high-quality images on its retina displays. Apple on Monday said that it’s developing its own ‘independent graphics design’ and will be ‘reducing its future reliance on Imagination’s technology’ over the next 15 to 24 months,” Kharpal reports. “Shares of the U.K. company plunged on Monday closing at £1.03 ($1.28), down from Friday’s close of £2.68. Apple is Imagination’s largest customer. Investec said in a note on Monday that it had expected Apple to account for around 50 to 60 percent of the group’s sales this year.”
“One theory about why Apple made the move is that it eventually wants to acquire Imagination for its key PowerVR GPU,” Kharpal reports. “Apple is Imagination’s fourth-largest shareholder with a stake of just over 8 percent, according to regulatory filings, and the Cupertino-based titan certainly has enough cash to make an acquisition. Last year, Apple confirmed that it was in talks to acquire Imagination but did not make an offer, showing that it was interested… The iPhone maker has also hired key players from Imagination and other chip companies as it strives to get a tighter hold on its supply chain, which could give it the expertise it needs to go it alone. Another theory behind the clash of the two companies is that it’s actually a bargaining tactic.”
Read more in the full article here.
MacDailyNews Take: Message: Don’t fsck with Apple.
Of course, one would hope there is some mechanism in place to prevent Apple from running roughshod over suppliers, offering them lowball offers and, if they refuse, destroying their stock prices with threats of lost business while also pilfering the supplier’s key employees. (See related articles below.)
We expect such mechanism to be pursued via legal channels if Imagination Technologies feels they have been/are being railroaded.
SEE ALSO:
Imagination Technologies’ shares collapse after Apple dumps UK chip designer – April 3, 2017
Apple nabs top talent from iPhone 7 GPU chipmaker Imagination Technologies – October 13, 2016
After failed takeover talks with Apple, Imagination Technologies sells stake to state-owned Chinese company – May 9, 2016
Apple in ‘advanced talks’ to acquire Imagination Technologies for PowerVR GPU – March 22, 2016
I haven’t seen any evidence that Apple used any strong arm tactics against Imagination Tech.
Then you either have not looked or you’re blind.
Yup !
When you play with Elephants … just one wrong move …
A merge move can make all the difference, as long as it is in the right direction.
This smells so bad, that the plot was up before clicking on the link. Sometimes you get hit with blood spatters, sitting in a front row seat. Appearances are everything. If Apple actually bought them, they would fairly need to pay pre-announcement stock prices. However I also think the asking price was way too high and Apple said, nope.
If Apple does make an offer to take over Imagination Technologies it better be a very sweat offer or the SEC, FTC, and the British equivalents will be all over this. It will look like Apple intentionally caused the implosion of the stock price just so Apple could swoop in and get the whole company for pennies on the dollar. Any offer to buy the whole company will have to be done *extremely* carefully.
Not that I don’t think they should do it as it might make perfect sense to do so. It could be just like their purchase of the other groups that lead to the non graphics parts of the Axx series processors. But, Apple will have to be exceedingly careful if it does so.
Perhaps you could tell us why, if Apple took its business away as a strategic move to make the company vulnerable and less than expensive to buy, that is illegal? Guess what? It isn’t and Apple could do exactly that if they want to.
I appreciate the other part of your comment, but with respect to the first part you have no idea what you are talking about.
If Apple manipulated the stock of a company it wanted to buy, it could be sued by the ripped off shareholders.
Of course, financial crimes are not likely to be prosecuted in a Jefferson Beauregard Sessions’ Department of Injustice as they are beating the bushes looking for the 2 people who voted more than once last November.
Or raiding pot shops.
Like I asked above, tell me exactly what is illegal regarding taking your business away and then buying the company at a discounted price. That is not illegal stock manipulation. Perfectly legal and a time tested strategy to gain control of a supplier or their technology/patent portfolio. Financial crimes? Perhaps you can be specific since you think you know what you are talking about.
One theory about why Apple made the move is that it eventually wants to acquire Imagination for its key PowerVR GPU
That’s NOT an Apple thing to do. But if they did do it, I’d *cough* imagine an uproar from governmental powers abroad.
(I said redundantly. I neglected to read the wise words above my post).
One benefit Apple will likely see is staff defecting from Imagination as they panic about the plunging stock price.
If Apple has withdrawn their business to by I T at a reduced price then shame on them and I expect them to be prosecuted for it, if possible.
Also, if the have the who would do business with Apple in the future? All people would remember is that Apple will build you up only to destroy you later, then pick at your carcass when you’re dead. It would be a PR disaster for them.