You’ll know Imagination Technologies PLC as the company behind the designs for the powerhouse GPUs that every Apple iDevice has included since the iPhone. Based on their IP Apple customised the GPUs to achieve the class leading performance in recent years.
Imagination released a press release today stating that Apple has told them of their intent to switch to an in-house GPU architecture in the next 15 months to 2 years.
Apple has told Imagination that it is “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 already only licenses the technology from Imagination Technologies plc. Specifically they license the GPU core IP with all implementation and testing being done in house. This move means that they will no longer pay royalties to Imagination as they are designing their own architecture.
Last year, Apple paid about £60.7m in royalties to Imagination and it is forecast to pay about £65m for the current financial year.
Apple represents more than half the revenue source for the company, in light of the announcement shares have dropped more than 60%
Shares fell 180p to 88p, valuing the company at less than £250m. It was worth about £765m before the plunge.
Imagination has hit back at Apple saying that they are dubious they can design a GPU without needing Imagination patents.
“Further, Imagination believes that it would be extremely challenging to design a brand new GPU architecture from basics without infringing its intellectual property rights, accordingly Imagination does not accept Apple’s assertions.”
However Apple certainly has the engineering talent as Apple Insider reports
According to AppleInsider, at least 25 engineers and managers have quit Imagination and gone on to work at Apple over the past two years.
DISCLAIMER: I AM IN NO WAY AFFILIATED WITH EITHER IMAGINATION TECHNOLOGIES OR APPLE SINCE LEAVING THE FORMER LAST YEAR
Anecdotally this was a big source of contention within the company when I was there. The hire/fire cycle is extremely high for a UK company due to relatively lower salaries and cost cutting measures. I feel sorry for all the peeps I know who took equity.
Edit: As always Anandtech has a great technical piece.
They mention that the patents may be more of just an architectural problem:
- PowerVR Texture Compress (PVRTC) – Used extensively
- Patents associated with maintaining backwards comparability – Build into the core of iOS
They also speculate that we could see an Apple GPU as early as the upcoming iPhone 8. Also this 15-24month timeframe means Apple will likely have to release low and high end parts containing new GPUs.