Former Apple supplier Imagination Technologies puts itself up for sale

“Imagination Technologies, the British firm that lost 70 percent of its value after being ditched by its biggest customer Apple, put itself up for sale on Thursday in a disappointing end to a once-great European tech success story,” Kate Holton reports for Reuters.

“Founded in 1985 and listed in 1994, Imagination has been rocked by Apple’s announcement in April that it was developing its own graphics chips and would no longer use Imagination’s processing designs in 15 months to two years time,” Holton reports. “Apple’s decision, which analysts said posed an existential threat to the company, sent Imagination’s shares plummeting 70 percent on April 3 and they have barely recovered since.”

“The stock jumped as much as 21 percent on Thursday, however, after the sale announcement to 149.5 pence, giving the company a market capitalization of 425 million pounds ($538 million),” Holton reports. “Analysts said potential buyers could include Intel, Qualcomm, Mediatek, CEVA and various entities from China, while Apple itself could be interested.”

Read more in the full article here.

MacDailyNews Take: Tim Cook can play hardball when he wants to. Imagination should’ve taken Apple’s March 2016 offer.

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.MacDailyNews, April 4, 2017

(Unless Apple buys them, of course. Shareholders’ suits could still happen, though, depending on the deal. – MDN Ed. June 22, 2017)

There’s more than one way to acquire a company.MacDailyNews, October 13, 2016

SEE ALSO:
Imagination Technology starts dispute process with Apple – May 4, 2017
UBS: Imagination likely to see Apple royalties slashed, then cease altogether – April 19, 2017
It’s getting even tougher to be an Apple supplier – April 19, 2017
Without Apple, Imagination Technologies’ PowerVR has no future – April 10, 2017
Apple steps up homegrown GPU plans with London hiring spree – April 9, 2017
Why Apple’s ditching of Imagination is critical for the future of the iPhone – and maybe even the Mac – April 5, 2017
Apple aims for more control, less cost as it accelerates in chip design – April 5, 2017
Apple could look to buy Imagination Technologies after ditching the chip firm, share price plunge – April 4, 2017
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

17 Comments

  1. Extreme capitalists blame market forces for the demise of their trusted partners just as Rightwing Fundies blame Holy Scripture for condemning “sinners” to Hell.

    I believe in an egalitarian, secular society where the corporation is not a person, money is not free speech, and private money is prohibited in politics.

    At the same time, however, I adore my iMac and iPad.

    1. What on earth does this have to do with your bigotry against religious people and your desire to use the government to censor and suppress political beliefs and candidates that you disagree with?

      1. Whatever. Just keep your religion out of my government. Otherwise, I may be forced to create my own version of creationist fantasy and get it “recognized” by the government so that I can fight fire with fire.

        If religious organizations want to be freed to participate in politics and elections, then they should have to give up their tax-exempt status. Otherwise, stick to religion and the care and feeding of your flock and quit whining about a “war” on religion. You can have all of the freaking religion that you want as long as you do not try to force it on me or inject it into law.

      2. Wow, Atlman, that is quite a jump.

        In America you are free to believe as you wish and that includes no faith or no preference. I myself am an agnostic, having examined the Christian faith and found it needing more suspension of disbelief than I am willing to afford a work of fiction- much less something held to be perfect and divine.

        I do not dislike religious people, but demand they keep religion out of government and not declare open season on all who feel differently. I also do not dislike Conservative people, but have no use for NeoCons or Republicans that hide behind the Libertarian title. If Republicans were truly Libertarian they would not have an ongoing Jihad against abortion rights and casual adult use of Marijuana among other things.

        I cannot speak for Mr Dingler, but largely agree with his post. I will assent to corporations as people when they are taxed like people, can be drafted into the Army like people, convicted of felonies like people and be sentenced to death like people. I want all tax exemptions removed from all Churches and Church property. I also object to the Republican posit that money is speech.

        If you wish to calm down and think more clearly I suggest you smoke a joint and get laid tonight. It will do your soul for more than any prayers or sermons.

  2. Dude, seriously. This company did not mess with Apple in order for Tim Cook to respond by playing hardball. Apple wants to reduce the amount they are paying licensees and component manufacturers in order to increase margins to make up for declining hardware sales. (Note: this explains their suing Qualcomm over licensing terms that they negotiated and agreed to, had been paying for years, and what Qualcomm imposes on every single other company that uses their IP. Apple went with them with a “proposal” where Apple would have been paying the same as other companies that sold a fraction of devices that Apple does … where Apple would be paying the same as a smaller player that sells maybe 15 million phones and tablets a year instead of 50 million a quarter.) So as part of this they decided to bring as many of their licensing and component needs in house.

    They initially considered buying Imagination Technologies to avoid paying licensing fees. However, they never actually made an offer to purchase them. They instead decided that designing their own GPU technology that was superior to what they were licensing from Imagination Technologies was a superior route … better AND cheaper. I agree with them. They chose to hire Imagination Technologies engineers to help make the better, cheaper next-gen GPU tech, again which was their right as well as a good move because how better to improve upon the existing design than to hire the designers.

    Imagination’s response was to inform Apple that if Apple’s new tech incorporated their old tech, they would have to pay. This is 100% appropriate and accurate if Apple’s new GPUs incorporate any of Imagination’s IP, and that former Imagination engineers are working on the new GPUs makes it a reasonable line of thought.

    This current development is simply Imagination deciding to fold after realizing that any money they could get if Apple is incorporating their IP is not enough to keep them in business, and also that they are unlikely to get new customers elsewhere, as Microsoft and Android products use entirely different GPU tech from Intel, AMD, Qualcomm and Nvidia (among others) that they have years invested in, and this includes the Vulkan graphics software that Android and Linux products use that is totally incompatible with Imagination’s hardware and software. So they decided to sell the company to try to gain as much value from it as they can while it still has value. Some company may want the rest of their engineering talent before they jump ship, as well as their patents, but that is about it.

    So there is nothing that Imagination Technologies could have done that would have preserved their relationship with Apple or gotten Apple to buy them. Claiming otherwise is just being an Apple apologist. Which makes absolutely no sense when Apple has nothing to apologize for. Apple isn’t some government program or charity/nonprofit whose job it is to keep suppliers and other companies afloat. Apple’s only responsibility is to Apple. Apple did not breach their contract with Imagination Technologies, nor did they act in bad faith. In contrast, Apple gave them TWO YEARS NOTICE. Apple is certainly not obliged to continue to use Imagination’s IP when they are capable of making a superior solution on their own. They even have the right to go to another company whose tech is inferior if it is cheaper, or for strategic purposes (like the deal they just signed with Nokia to resolve a patent dispute) if they choose.

    But claiming that Imagination Technologies did anything wrong here is just as bad and false as claiming that Apple abuses their suppliers.

    1. “Note: this explains their suing Qualcomm over licensing terms that they negotiated and agreed to, had been paying for years, and what Qualcomm imposes on every single other company that uses their IP.”
      Except they don’t impose the same royalties on all their customers or offer comparable licensing or licensing at all in some cases. All in contravention of FRAND commitments.
      Do pay attention.

    2. “Apple isn’t some government program or charity/nonprofit whose job it is to keep suppliers and other companies afloat.”
      Agreed. If Apple is in-line with the law, it could do/should do, anything in it’s best interest. It’s an irony to me to (assumably) think that many that think Apple should be nice, considerate in such a situation, believe in the survival of the fittest. Why doesn’t that principle operate here. It should, it does and it will. It’s business.

  3. But but but…the MDN basement CEOs repeat ad nauseum that TC is useless, has no ahem…’imagination’, no true business sense, no right to run Apple…and should be sacked?
    …in their small world they are all super warriors.
    Pffft…

  4. This is the kind of story that, if true, leads me to think there should be regulations in place to protect companies from destruction in the event an Apple takes their employees, low balls pricing and then threatens to stop business if they don’t succumb. But then, I am an Ayn Rand economic priciplist so rather than call for regularion, I would choose NOT to do business with Apple in the first place OR I would stay private, sign as lengthy a contract as possible with the intent of closing my doors and retiring when the contract expired. In my view though, this article is NOT complimentary to Apple.

    1. Except you have no evidence for any of that and which makes no sense since Apple is one of Imagination’s largest stock holders – tho’ that might not be the case now, held talks to buy the company when the share price was riding high but which subsequently broke down and then gave 1.5 to 2 years warning which is unheard of in business.
      But somehow you fault Apple?

  5. We don’t know for sure why Apple skip Qualcomm. It could be as simple as they pursue a technology superior to Qs or better suited for future developments (roadmap) that they foresee. Or it could be a pure businessdecision which I think in fact is less likely. So how could Qualcomms demise been avoided? Should Apple paying them social welfare for years? I definitely think Apple has been as fair as they could be.

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