Intel to sell remaining stake in Apple partner & mobile GPU maker Imagination Technologies

Posted:
in General Discussion edited March 2015
The Intel Foundation will sell its 4.9 percent stake in Imagination Technologies, the company whose PowerVR graphics processors are a key component of Apple's iPhone and iPad, it was announced on Thursday.




Once the sale is complete, the Intel Foundation and Intel Capital will no longer hold any shares in Imagination Technologies, according to J.P. Morgan Securities. Intel had been a licensee of the British chipmaker's 3D technology.

Apple, however, remains a shareholder and a licensee of Imagination Technologies, having renewed its agreement with the company a year ago. Terms of that deal were not announced, but Imagination did say in February 2014 that the agreement spans multiple years and covers a variety of uses.

In late 2008, Apple bought a 3.6 percent stake in Imagination Technologies, and has since upped its share to nearly 10 percent. The company's powerful PowerVR Series 6 chips have powered every Apple "iDevice" since the third-generation iPhone 3GS.

The latest-generation A8 processor found in the iPhone 6 and iPhone 6 Plus boasts the PowerVR GX6450, a six-core graphics processor that boasts a performance improvement of up to 84 times greater than the first iPhone released in 2007. And the A8X chip found in the iPad Air 2 features even greater graphics performance, trouncing competing tablets on the market today.
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Comments

  • Reply 1 of 31
    What could have happened:

    Tim: Yeah, we want to buy Imagination Technologies.
    Brian: Oh, really?
    Tim: Yep. Found some spare change in Jony's sofa, so we're going to buy them. That means you need to sell your stake.
    Brian: What makes you think we're going to do that?
    Tim: See this MacBook? (pulls out MacBook)
    Brian: Yes, looks like that new MacBook Air you've been working on.
    Tim: It doesn't have an Intel chip in it anywhere.
    Brian: ...oh.
    Tim: We'll give you an extra two years of portable business and let you keep the Mac Pro and high end iMac business for another seven if you sell your stake.
    Brian: That's extortion.
    Tim: No, it's negotiation. Just think; as PC shipments continue to slide, wouldn't it be just awful if your expensive high end chip business lost one of its largest customers?
    Brian: I see your point. We'll sell it ASAP.

    Or something like that.
  • Reply 2 of 31
    sockrolidsockrolid Posts: 2,788member
    10% + 4.9% = 14.9% if Apple bought Intel's shares.

    Would 14.9% make Apple the largest shareholder?
  • Reply 3 of 31
    What could have happened:

    Tim: Yeah, we want to buy Imagination Technologies.
    Brian: Oh, really?
    Tim: Yep. Found some spare change in Jony's sofa, so we're going to buy them. That means you need to sell your stake.
    Brian: What makes you think we're going to do that?
    Tim: See this MacBook? (pulls out MacBook)
    Brian: Yes, looks like that new MacBook Air you've been working on.
    Tim: It doesn't have an Intel chip in it anywhere.
    Brian: ...oh.
    Tim: We'll give you an extra two years of portable business and let you keep the Mac Pro and high end iMac business for another seven if you sell your stake.
    Brian: That's extortion.
    Tim: No, it's negotiation. Just think; as PC shipments continue to slide, wouldn't it be just awful if your expensive high end chip business lost one of its largest customers?
    Brian: I see your point. We'll sell it ASAP.

    Or something like that.

    Why would Apple be forcing Intel to sell their 4.9% stake in Imagination Technologies?

    Is Apple wanting those shares?

    Apple already has a bigger stake than Intel anyway.

    Perhaps Intel invested in them long ago... but haven't seen the result they are looking for. So maybe they were looking to get out.
  • Reply 4 of 31

    Not a big deal. Intel Foundation is a non-profit charity. Any money they make can only go into further charitable contributions and can't go back to directly benefit Intel.

     

    How did the Foundation get the shares in the first place? I'm guessing that Intel contributed them (for a tax write-off) because they wanted to be at an arms length from Imagination.

  • Reply 5 of 31
    mjtomlinmjtomlin Posts: 1,920member

    This is definitely a company Apple should consider buying.

  • Reply 6 of 31
    MacProMacPro Posts: 18,358member
    I can't read the name Intel at the moment without seeing that recent headline where the Intel CFO stated ... "We're so far ahead, Apple's performance would be seriously hindered if the company stopped working with us" ... and thinking ... wow, I just would not say that out loud if I were him...
  • Reply 7 of 31

    Or Intel is selling their share because they plan on investing in another competing company.

  • Reply 8 of 31
    bdkennedy1 wrote: »
    Or Intel is selling their share because they plan on investing in another competing company.

    Or is it because they need the cash.
  • Reply 9 of 31
    Intel probably has a new partnership in the works with Nvidia. Both need a new mobile strategy. Tegra is a decent mobile platform with no real traction and little or no profit. Atom is still struggling to break into the mobile market even after giving it away all last year. Intel integrated graphics are still far behind Nvidia and ATI/AMD, and even Apple on mobile. A strategic partnership just makes sense at this point.
  • Reply 10 of 31
    sockrolid wrote: »
    10% + 4.9% = 14.9% if Apple bought Intel's shares.

    Would 14.9% make Apple the largest shareholder?

    Maayyyyybeeeee…. 15% isn't the largest a company has held but reading the Wikipage the Saad Group had to divest their shares years ago.
  • Reply 11 of 31
    feynmanfeynman Posts: 1,087member
    Quote:
    Originally Posted by TheWhiteFalcon View Post



    What could have happened:



    Tim: Yeah, we want to buy Imagination Technologies.

    Brian: Oh, really?

    Tim: Yep. Found some spare change in Jony's sofa, so we're going to buy them. That means you need to sell your stake.

    Brian: What makes you think we're going to do that?

    Tim: See this MacBook? (pulls out MacBook)

    Brian: Yes, looks like that new MacBook Air you've been working on.

    Tim: It doesn't have an Intel chip in it anywhere.

    Brian: ...oh.

    Tim: We'll give you an extra two years of portable business and let you keep the Mac Pro and high end iMac business for another seven if you sell your stake.

    Brian: That's extortion.

    Tim: No, it's negotiation. Just think; as PC shipments continue to slide, wouldn't it be just awful if your expensive high end chip business lost one of its largest customers?

    Brian: I see your point. We'll sell it ASAP.



    Or something like that.

    Brilliant. You should right for Joy of Tech.

  • Reply 12 of 31

    Intel years ago sold its ARM processor division after refusing to make ARM chips for Apple.  Look where that took Intel.  It locked Intel out of mobile.  They were so short sighted.

     

    I guess Intel has given up the ghost on mobile.  This is why it is selling its remaining stake in a mobile GPU company.  

     

    Or maybe Intel thinks it can do GPUs better with what it already has.

  • Reply 13 of 31
    It's interesting that some of the greatest advancements in CPUs and GPUs are coming from the UK. It's kind of like with music, relatively few people but so much talent.
  • Reply 14 of 31
    Why would Apple be forcing Intel to sell their 4.9% stake in Imagination Technologies?

    Is Apple wanting those shares?

    Apple already has a bigger stake than Intel anyway.

    Perhaps Intel invested in them long ago... but haven't seen the result they are looking for. So maybe they were looking to get out.

    If I remember correctly, Intel bought its 4.9% stake very shortly after bought its own 4.9% stake. Intel did not want Apple doing something it could not be aware of. The ARM fiasco was probably the impetus for the purchase, in my opinion.

    Why Intel chose not to increase its stake after Apple had is unknown. With Intel selling its stake, I guess Apple just might buy the company, which would be awesome! Dealing with Imagination's other customers might be tricky though. I think Samsung is a customer.

    So what could Apple want with Imagination? Primesense 3D technology needs graphics that cannot be easily replicated by fast followers! So does maps, health, television (shouting out to Gene), games, Touch ID, camera, etc. who can say the purchase has not already occurred and Intel HAD to exit?

    Time will tell.
  • Reply 15 of 31
    mjtomlinmjtomlin Posts: 1,920member
    Quote:

    Originally Posted by leavingthebigG View Post



    Why Intel chose not to increase its stake after Apple had is unknown. With Intel selling its stake, I guess Apple just might buy the company, which would be awesome! Dealing with Imagination's other customers might be tricky though. I think Samsung is a customer.



    So what could Apple want with Imagination? Primesense 3D technology needs graphics that cannot be easily replicated by fast followers! So does maps, health, television (shouting out to Gene), games, Touch ID, camera, etc. who can say the purchase has not already occurred and Intel HAD to exit?

     

    There are already many other mobile GPU companies that Imagination's clients could switch to after whatever licensing deals expire - should Apple buy them - same thing happened when they bought P.A. Semi and Authentic.

     

    Imagination obviously has many talented engineers working for them not just in GPUs, but CPUs and DSPs. All of which could be beneficial to Apple's own silicon design team. However, I think Apple could benefit the most from their GPU expertise which is an area I think Apple wants to bring in house next.

  • Reply 16 of 31
    wizard69wizard69 Posts: 12,860member
    mjtomlin wrote: »
    There are already many other mobile GPU companies that Imagination's clients could switch to after whatever licensing deals expire - should Apple buy them - same thing happened when they bought P.A. Semi and Authentic.
    Not as many companies with high quality GPUs though. Even ARMs GPU has a tough time competing with Imagination.
    Imagination obviously has many talented engineers working for them not just in GPUs, but CPUs and DSPs.
    Imagination did purchase MIPS technology and it looks like they want to compete with ARM with the same marketing strategy.
    All of which could be beneficial to Apple's own silicon design team.
    If Apple really wanted that technical capability they would have purchased MIPS in 2013.
    However, I think Apple could benefit the most from their GPU expertise which is an area I think Apple wants to bring in house next.

    They have more or less brought the GPU development in house already by hirering many AMD engineers. There is enough customization in the A8X GPU to believe that this is the first example of Apple going to more custom hardware. I have is feeling that Apple is right where they want to be with their design teams.
  • Reply 17 of 31
    wizard69wizard69 Posts: 12,860member
    solipsismy wrote: »
    It's interesting that some of the greatest advancements in CPUs and GPUs are coming from the UK.
    At least in ARMs case I have to believe the real advancement isn't in the technology but rather the business model. The licensing of their designs allows manufacutres to rapidly integrate their own improvements. Thus the super chips from Apple and Qualcomm that go far beyond reference designs from ARM.

    In any event ARMs licensing approach has allowed them to sneak up on Intel which is the real surprise here.
    It's kind of like with music, relatively few people but so much talent.

    Well the thing with music is that talent is only part of the equation. Just being a foriegn band is enough to wet many a panty. The same goes for American bands touring Europe. Sometime talent doesn't mean much in the music business.

    As for other talents, like any business it is all about leadership. AMD is a perfect example of what happens when a business suffers from leadership that can't provide technical direction. AMDs latest leadership choice seems to acknowledge that a technical company can't be run on "management" skills alone. One of Americas biggest issues is the rise of the professional manager that doesn't have a clue as to the underlying technology he is trying to manage. Much talent goes down the drain so to speak as they become disillusions with the management teams that come and go like the tides at the beach. Wall Street plays its part here too, but the point here is there is lots of talent in America that just isn't being leveraged as management teams follow the latest trends.
  • Reply 18 of 31
    Apple will announce shortly that they are buying out Imagination Tech ... This is a shot in the arm they need to reduce / eliminate reliance on Nvidia !!!
  • Reply 19 of 31

    I think they are selling them in the wake of the very likely event of Imagination losing the lawsuit against nvidia.

  • Reply 20 of 31
    This makes sense in only one context - where Intel is forced to sell these shares when the company is being acquired. Otherwise, this has no sense whatsoever.

    The moment Apple launched Metal API that was exclusively designed for PowerVR, this became a company that Apple would acquire one way or other, some day.

    People still haven't understood Metal and the edge that Apple gets because of Metal. By minimising the latency of calls made via Metal, Apple effectively has made the GPU no different than the CPU. you can even use the GPU for very small tasks, without worrying about overhead.

    No other customer of Imagination benefits from Metal - except Apple! And Apple benefits so much.

    This has acquisition written all over it - and believe me, this will be a bigger power play than even the PA Semi buy.

    And everyone who thinks Intel is way more powerful than ARM is simply blind. They don't realize Apple has taken a totally different route and is now so far ahead of Intel, it will crush Intel.

    Macs will be using A-series processors real soon - and the trigger will be that their raw performance as well as performance per watt will be miles ahead of where Intel's top of the line chips are!
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