Imagination enters dispute resolution with Apple, prepares to sell off secondary businesse...

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Apple's split-up with graphics tech supplier Imagination Technologies has entered into a "dispute resolution procedure," the latter company announced on Thursday, also revealing that it plans to sell off two of its businesses, MIPS and Ensigma.




Imagination has been "unable to make satisfactory progress with Apple to date regarding alternative commercial arrangements for the current license and royalty agreement," the company said. The company has in fact accused Apple of "unauthorized use of Imagination's confidential information and Imagination's intellectual property rights," without going into further details.

MIPS and Ensigma are being sold off to "strengthen Imagination's balance sheet" and concentrate rescources on its PowerVR graphics division. MIPS specializes in embedded processors, while Ensigma does intellectual property licensing related to connectivity technology. Apple is currently Imagination's biggest customer, making its departure a serious threat.

PowerVR is "well placed in mobile, automotive, digital TV/set top boxes and the rapidly emerging AR/VR market and having the potential to exploit investments for artificial intelligence in the medium-term," Imagination said.

On April 3 the company revealed that Apple would stop using its graphics architecture within the next two years, choosing instead to move development in-house. Apple currently relies on PowerVR for iPhones, iPads, and iPods, as well as the Apple Watch and Apple TV.

During the past two years though Apple has hired away a number of Imagination workers, presumably laying the foundations for custom GPU design. In fact in its early April announcement Imagination said it asked Apple for evidence that it could build its own architecture without violating intellectual property, but was denied.

Apple has increasingly moved towards first-party chip design, beginning with its ARM-based A-series processors, then on to parts like the S1 and S2 systems-on-chip for the Apple Watch, the W1 wireless chip, and the T1 authentication chip in the MacBook Pro. The company is even thought to be working on an ARM processor that could handle low-power functions in Macs.

Comments

  • Reply 1 of 15
    lkrupplkrupp Posts: 6,785member
    We’re always hearing about how Apple is too dependent on the iPhone and needs to diversify. I never really thought about the fact that there are companies out there who’s very existence is tied to Apple as their biggest or only customer. 
    cali
  • Reply 2 of 15
    anton zuykovanton zuykov Posts: 1,031member
    lkrupp said:
    We’re always hearing about how Apple is too dependent on the iPhone and needs to diversify. I never really thought about the fact that there are companies out there who’s very existence is tied to Apple as their biggest or only customer. 
    But that is the decision/path that was taken by those companies, not by Apple. 
    jbdragon
  • Reply 3 of 15
    jkichlinejkichline Posts: 1,331member
    I'm going to go out on a limb here and say that Apple probably was working closely with Imagination on ways to improve the GPU for use in iOS.  Apple, being a shareholder and deeply invested in the PowerVR architecture, probably wanted Imagination to not go and give away their strategic advantage to competitors. Which they did and are still doing because they want more and more.  Intel pulled this crap when they sold out Apple's MacBook Air to other manufacturers as an "UltraBook" and got them to undercut Apple pricing.

    So Apple really only had one choice since they want to keep strategic leverage... part ways.  It's a win-win for Apple.  We know they want to pull development for chip design in-house anyway to maintain their strategic technological advantage by controlling their own destiny.  Pulling out of Imagination has caused the stock to plummet and caused them to layoff staff whom can be easily hired by Apple.  It has also made them more affordable, so Apple could come in and purchase the company and all their assets instead of drawing out a legal battle.

    I think shareholders would be foolish to not entertain a buyout by Apple, especially if they can get a premium on top of the tanking stock.  While I believe Apple wouldn't have done something like this without having a replacement strategy, they could also be just calling their bluff to force them to the table on these matters.
    edited May 2017 jbdragonpscooter63damn_its_hot
  • Reply 4 of 15
    applesauce007applesauce007 Posts: 1,603member
    Imagination should have sold to Apple when they held talks.
    Now Apple will go it's own way and Nvidia may make Imagination irrelevant.

    I can't believe Imagination expected Apple to just show them its design IP to prove that Apple is not using their design.
    I think they made a deadly mistake thinking that low power GPUs could not be made without their IP and it's going to cost them dearly.

    damn_its_hot
  • Reply 5 of 15
    Rayz2016Rayz2016 Posts: 4,556member
    Imagination should have sold to Apple when they held talks.
    Now Apple will go it's own way and Nvidia may make Imagination irrelevant.

    I can't believe Imagination expected Apple to just show them its design IP to prove that Apple is not using their design.
    I think they made a deadly mistake thinking that low power GPUs could not be made without their IP and it's going to cost them dearly.

    This is what made me laugh. 

    The police don't go around demanding everyone prove they haven't committed a crime. Someone in Imagination's legal department is smoking crack. 

    If you think Apple is infringing on your IP then get in line and sue them … like everyone else. 
    edited May 2017 pscooter63tycho_macuserapplesauce007damn_its_hot
  • Reply 6 of 15
    freeperfreeper Posts: 77member
    lkrupp said:
    We’re always hearing about how Apple is too dependent on the iPhone and needs to diversify. I never really thought about the fact that there are companies out there who’s very existence is tied to Apple as their biggest or only customer. 
    But that is the decision/path that was taken by those companies, not by Apple. 
    Small companies like Imagination often do not have the resources to service more than one big account at a time. Apple has also known to either demand exclusive relationships outright or make their strong dislike for companies that deal with both Apple and the competition on similar/competing products and threaten to end the agreement and go elsewhere. Do not forget that Apple is legendary for the pressure that they put on their suppliers, to the point that some suppliers terminate their agreements with Apple, do not enter into agreements with Apple in the first place or even go bankrupt. I am not going to shed a tear over it because Apple isn't doing anything illegal and capitalism is by definition a dog-eat-dog scene, but Apple is definitely not some altruist with an "one for all/all for one" approach towards their suppliers. Instead, they are very explicitly and blatantly out for themselves. Choosing to believe that Apple has the same relationship with their suppliers and partners that they have with their customers is an exercise in self-delusion. Especially considering that even Apple's relationship with their customers is financial self-interest - it creates customer loyalty for products that often cost up to twice as much as the competition - as opposed to their being "nice" or something.
  • Reply 7 of 15
    gatorguygatorguy Posts: 20,281member
    Rayz2016 said:
    Imagination should have sold to Apple when they held talks.
    Now Apple will go it's own way and Nvidia may make Imagination irrelevant.

    I can't believe Imagination expected Apple to just show them its design IP to prove that Apple is not using their design.
    I think they made a deadly mistake thinking that low power GPUs could not be made without their IP and it's going to cost them dearly.

    This is what made me laugh. 

    The police don't go around demanding everyone prove they haven't committed a crime. Someone in Imagination's legal department is smoking crack. 

    If you think Apple is infringing on your IP then get in line and sue them … like everyone else. 
    That may be the end result: A lawsuit. In the meantime the contract between them likely includes mandatory arbitration before legal action. 
  • Reply 8 of 15
    gmgravytraingmgravytrain Posts: 760member
    Maybe this dispute is because Apple announced so early that it was going to move away from Imagination Technologies components and that caused the stock to tank. However, it's not Apple's fault that greedy investors quickly dumped Imagination Technologies stock when they heard Apple's announcement. There's still at least two more years on the contract with Apple. Maybe another problem was poaching of Imagination Technologies engineers by Apple. I'm not taking sides. I'm just curious on how contracts work. I didn't know a component supplier could strong-arm a company into forcing them to always renew a contract. I suppose I thought the contract gave clear terms over what could or couldn't be done. I'll be curious to see how this dispute turns out. Why is it Apple is always having these problems? Maybe they should get smarter lawyers.
  • Reply 9 of 15
    freeperfreeper Posts: 77member
    Imagination should have sold to Apple when they held talks.
    I wish people would stop saying this. Apple never at any point decided to buy Imagination on any terms, so they never made an offer for Imagination to accept or reject. Instead, Apple decided that it was better to create their own graphics product. Yes, Apple hired Imagination engineers for that effort but they also hired engineers from other companies as well as hires straight out of college too. So Apple is not just developing their own version of Imagination's product, but rather gaining expertise and ideas from various sources - including their own R&D people - to create their own GPU product. Pretty much the same as with the Ax chips ... they didn't buy an ARM design company or hire guys from an ARM company to create something similar, but rather used a mix of people to create their own ARM design.

    So this isn't Beats, where Apple actually added another company's products to their own product line. And it isn't Authentec, which Apple bought in order to prevent them from licensing their IP to Android competitors,which forced them to either go without such tech like Google, LG and HTC or create their own bad ones like Samsung until Qualcomm integrated good fingerprint scanning tech in their SOCs.

    So there never was any solution for Imagination: Apple doesn't need them anymore and the competition never needed them in the first place. But then again, it wasn't Apple's responsibility to protect Imagination's best interests in the first place. Apple gave Imagination plenty of notice to develop new products and seek new markets and customers for them. If Imagination can, great. Hopefully Imagination will come up with something that will contribute to an actually profitable and widely used VR product instead of the current situation where the most popular product is one that Samsung gives away for free to people who pre-order their premium phones, for example. But if they can't, then they won't be the first tech company to go out of business or the last.
    gatorguypscooter63
  • Reply 10 of 15
    georgie01georgie01 Posts: 224member
    freeper said:

    Small companies like Imagination often do not have the resources to service more than one big account at a time. Apple has also known to either demand exclusive relationships outright or make their strong dislike for companies that deal with both Apple and the competition on similar/competing products and threaten to end the agreement and go elsewhere. Do not forget that Apple is legendary for the pressure that they put on their suppliers, to the point that some suppliers terminate their agreements with Apple, do not enter into agreements with Apple in the first place or even go bankrupt. I am not going to shed a tear over it because Apple isn't doing anything illegal and capitalism is by definition a dog-eat-dog scene, but Apple is definitely not some altruist with an "one for all/all for one" approach towards their suppliers. Instead, they are very explicitly and blatantly out for themselves. Choosing to believe that Apple has the same relationship with their suppliers and partners that they have with their customers is an exercise in self-delusion. Especially considering that even Apple's relationship with their customers is financial self-interest - it creates customer loyalty for products that often cost up to twice as much as the competition - as opposed to their being "nice" or something.
    I tend to see Apple's approach as one of relative idealism (relative to the industry). Those who can't relate to idealism see it as demanding and uncompromising and obsessed with one perspective. Apple believes they know what is best for their customers, at least within the skill set they specialise in (I think it's fine to sacrifice some aspects customers may desire in order to excel in stronger areas). And to make an idealistic vision happen inevitably requires demands on those producing the products. I don't think any of this means the idealistic approach is one of self interest.

    Given that Apple is made up of many people and no longer has quite the strong idealistic vision of Jobs, they aren't a strong idealistic company anymore, and like everyone else they undoubtedly make bad decisions in how they deal with others, but the idealistic attitude still remains and I think that's probably what's mostly behind what you think you see.
  • Reply 11 of 15
    pk22901pk22901 Posts: 138member
    Maybe this dispute is because Apple announced so early that it was going to move away from Imagination Technologies components and that caused the stock to tank. 
    To be accurate, Imagination announced the issue; Apple preferred continued radio silence and, perhaps, the opportunity to negotiate a fair and balanced separation with Imagination.
  • Reply 12 of 15
    command_fcommand_f Posts: 289member
    I presume that Imagination was obliged to announce the loss of such a large part of their business, which is how the issue became public. Worrying about Apple infringing their IPR is understandable: they worked closely with Apple in a field known to be strewn with IP hurdles so they'd be foolish not to check. Apple could easily infringe, knowingly or, more likely, unknowingly.

    I understand Imagination's desire to diversify its customer base; the Apple issue has shown why that is a good thing. I never understood why they bought MIPS though: did they think they were big enough to offer a competitive alternative to the ARM world (that is far more than just ARM the company)? MIPS was already the underdog and they clearly weren't going to sell to Apple, to name the biggest, as they are already invested in ARM technology (their own processors) and hence paying less to ARM the company.

    As to ARM-powered Macs, I don't see it. Apple has a world-class CPU-design group (used to do Motorola-compatibles, 3/4 years ago fielded the world's first 64-bit ARM that gives the iOS devices their performance advantage). The big creation work of the Apple ARM design is done for a while (it's essentially in the evolutionary improvement phase now) so they will have been doing other things since iPhone 5s. Surely the most likely path is for Apple to produce another new processor using that expertise but one that supports the x86 instruction set? No more expensive purchases from Intel (just like Imagination), control of their own priorities (e.g. ditch all the legacy dross that Windows needs but macOS doesn't), enable higher levels of integration and all with the benefit of nil impact on the software base.

  • Reply 13 of 15
    IanSIanS Posts: 31member
    Perhaps Imagination should have concentrated on Power VR earlier. I think the other interests and distractions were part of the problem for Apple.
  • Reply 14 of 15
    misamisa Posts: 827member
    Imagination should have sold to Apple when they held talks.
    Now Apple will go it's own way and Nvidia may make Imagination irrelevant.

    I can't believe Imagination expected Apple to just show them its design IP to prove that Apple is not using their design.
    I think they made a deadly mistake thinking that low power GPUs could not be made without their IP and it's going to cost them dearly.

    Considering that AMD, nVidia and Intel all produce their own GPU's. AMD's tech wound it's way into ARM's Mali, nVidia has a hard time getting anyone to buy their parts, and basically got Nintendo to sell a rebranded Shield as the Switch, Intel keeps producing rubbish for GPU's that are only designed for decoding video. 

    Basically the PowerVR stuff already abandoned the desktop, and the desktop parts have been power-reduced over time to be more competitive with mobile parts. So it was only a matter of time. The only patent that I believe PowerVR held that was of any value had relation to tile-based rendering, thus allowing parallelization by adding more "rendering cores" without having to specifically code for it. Where as on nVidia and AMD's parts, you explicitly have to code for the parallization available in the GPU, and if the GPU is too small, you have to iteriate over the rendering path, thus cutting the performance in half, each time. I might also be comepletely wrong as I haven't done any GPU work in a while, but I distinctly remember the tile-based-rendering was PowerVR's selling point and what allowed it to be used for mobile. As the die shrinks got smaller, more rendering cores could be put in the same space, thus the power budget remained the same. The desktop PC GPU's have much longer pipelines and thus why every mobile GPU is rubbish from everyone.


  • Reply 15 of 15
    irontedironted Posts: 129member
    Just sell it to China please.
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