“Apple Inc is likely to pay graphics chip designer Imagination Technologies just one third of its current royalty rate as the smartphone giant wind downs their supply deal over the next two years, UBS estimated on Wednesday,” Eric Auchard reports for Reuters. “UBS analysts predicted that Imagination would become loss-making by fiscal 2019 without any Apple royalty contributions and that the British chip designer will have to consider potential cost-cutting moves to redress the balance.”

“Imagination is in talks with Apple on a new licensing deal. UBS forecasts Apple is likely to ratchet down the royalty rate it currently pays of around $0.30 to closer to $0.10 – the rate Imagination charges customers such as MediaTek,” Auchard reports. “Valuing London-listed Imagination using discounted cash flows, UBS analysts estimated its Apple business is worth 75 pence, while, without Apple, the stock is worth just 35 pence. That totals 110 pence, using a sum-of-the-parts valuation.”

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MacDailyNews Take: R.I.P, PowerVR.

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