Apple Designing own Graphic Chips for Iphone: High chances that we would witness an A-series chip with an Apple designed CPU and GPU.
All these years, Apple Inc. had a tie up with Imagination Technologies Group plc, a British-based R & D company which provides the PowerVR graphics processors used in the iPhone,iPad and Apple Watch. Imagination Technologies got a small royalty on every iPhone or iPad came out from Apple, and the association was quite a smooth one.
Now, Imagination Technologies gave out a statement which says, Apple will no longer be using imagination’s Technology’s graphic design in their devices. Apple has been working on their graphic design to control their devices. As in the report, “Apple has asserted that it has been working on a separate, independent graphics design to control its products and will be reducing its future reliance on Imagination’s technology.”
This announcement has a great impact on Imagination Technology who has their primary revenue on Apple. Ending April 2016, Apple paid 60.7 million pounds to Imagination Technologies including their royalty which is almost half of the company’s overall revenue for the year. This April, the company is expecting around 65 million pounds from Apple for the last 12 months. Analysts quote that Imagination Technologies will have to make significant Operational changes to fit into the new revenue profile.
Apple is also one of the major stakeholders in Imagination Technologies with more than 8 percent shares. After this announcement from Apple, the share value of Imagination Technologies plunged as much as 69 percent.
According to the statement, Apple will stop the deal in somewhere between 15 months and two years. This means revenue of Imagination Technologies will be at risk after the given time. Imagination Technologies also reported that they are reviewing their commercial arrangements with Apple.
In 2014, Imagination Technologies had extended its multi-use license agreement with Apple and Apple last year said they had some discussions to acquire Imagination Technologies which didn’t take shape. Later there were rumors that Apple has been secretly hiring technicians from Imagination Technologies to built its chipset in future. Now, it has come to life and the result in expected within two years.
Imagination believes that Apple wouldn’t be able to find success in its new effort without violating patents, intellectual property and confidential information of the company. Regarding CPU design, Apple has already nailed it and are a huge threat to the competitors. But GPU designing is all new and making it from scratch will be under high time reviews, and it’s a real big deal to perform as it did with Imagination Technology’s technology. This evidence has already requested to Apple, but the company refused to submit any.
By the end of the effort depending what is being produced by Apple, we would be there to spectate either a claim of patent or a brand new GPU design.