And here comes the update that we had been dreading. Imagination Technologies, the graphics chip designer who Apple dropped from its roster earlier in April, has today announced that it is putting the business up for sale in the market.
The British chip designer had been trying to resolve its surprising dispute with Apple, when it was intimated that Cupertino wanted to design its own graphics processors for the upcoming iPhone and iPad devices. It had taken the said decision to move majority of the design and development processes back home and not shell out huge sums on royalties.
This decision on Apple’s part was also a surprising one because it had been employing the graphics chip designs from Imagination since the days of the iPod. But, it is now pulling support for PowerVR graphics chips and developing its own independent graphics designs. Apple parting ways with Imagination Technologies was a sudden blow and left it mulling over what was to follow.
The chip designer relied on the Cupertino giant for half of its annual revenues, which amounted to around £60.7 million for the year ended April 2016. The Cupertino giant’s license fees and royalty payments are expected to amount to £65 million for the year ending April 2017. And it will be one of the last cheque’s Apple writes down on their name.
Speaking of the decision to put Imagination Technologies for sale, the official blog post states:
Over the last few weeks it has received interest from a number of parties for a potential acquisition of the whole GroupThe Board of Imagination has therefore decided to initiate a formal sale process for the Group and is engaged in preliminary discussions with potential bidders.
This is possibly the final blow for the chip designer, who’s valuation has dropped more than 70 percent over the last two months. The company had already initiated the sale of two of its businesses — MIPS and Ensigma. The sales, as mentioned in today’s blog post, are on track and will provide the British chip designer with a much-needed capital push to improve its balance sheet.
The former division, MIPS, is focused on the embedded processor markets and was acquired by Imagination back in 2012 for 60 million pound. The latter division, on the other hand, offers comprehensive IP licensing for connectivity products.
Further, Imagination Technologies has already stated that it is not particularly aware of Apple’s progress and plans for the graphics chip development. Earlier this year, Cupertino notified the chip designer that it will reduce dependence on their designs in the next 15 months or couple years. That’s a lot of time to research and develop its own chip designs but Imagination is doubtful that Apple will be able to build its own graphics chip without infringing on their patents. And the British giant is keeping an eye out for it.