Imagination technologies share price collapses as Apple announces it’ll make GPU on its own


Imagination technologies is British- based R&D company that holds several intellectual properties related to semiconductors and other related components.Apple worked closely with the company ever since the launch of the first iPhone.Apple has designed custom architectures in its A-series chips found on iPhone and iPad.


Apple s1 chip used in Apple Watch

Apple even tried to buy the firm but as the talks fell off Apple silently hired few engineers from the firm and started working on it own in-house chip design and built a team within the company to work on it.Apple announced that its distancing itself from Imagination technologies and making its own GPU.Apple has shown interest in building stuff internally rather than relying on third parties like Imagination technologies.Imagination technologies is mainly R&D company that researches around chip architectures and micro controller related things.

Apple designed  chips have proven to be highly power efficient  and faster as well.The recently announced A10 Fusion chip in iPhone 7 and 7 plus has 4 cores out of which 2 cores run at low power and 2 cored run at greater speeds for the better performance thereby optimising power consumption in iPhone.Apple also designed T1 timing controller.

This came off a surprise to Imagination technologies as more than 50% profits of the firm depend on the royalties paid by Apple for using its patents and other intellectual properties.Imagination technologies however tried to negotiate with Apple for alternative revenue model.Apple is putting its muscle behind custom design and in-house solutions for better optimisation and reduce reliance on third party suppliers so that devices can be assembled easily without any production bottlenecks.This isnt new as Apple already designed S1 chip in Apple Watch and W1 chip in AirPods and Beats range of wireless earphones.Imagination technologies says it’s extremely difficult to totally design chips without violating its patents and such a move could be an uphill task for Apple.