Imagination Technologies is selling two of its three major businesses to shore up cash after Apple dropped a bombshell.
UK chip manufacturer Imagination Technologies has opened a dispute with Apple over the use of its technology in the iPhone.
Signs that an IP row was brewing came in recent weeks when claims emerged that Apple’s own chip designs might breach Imagination Technologies’ patents.
‘Imagination has been unable to make satisfactory progress with Apple to date regarding alternative commercial arrangements for the current licence and royalty agreement’
– IMAGINATION TECHNOLOGIES
The company derives more than half of its revenues from a licensing deal with Apple.
News that Apple planned to end a contract with the manufacturer in 2019 to make its own design chips sent Imagination’s shares plunging 70pc.
Imagination’s technology features in the iPhone and the iPad.
Do not put all your eggs in the one Apple basket
The crux of Imagination’s case is that it does not believe it is possible for Apple to design or make chips without using its technology in some shape or form.
“Imagination has been unable to make satisfactory progress with Apple to date regarding alternative commercial arrangements for the current licence and royalty agreement,” the company said in a statement.
“Imagination has therefore commenced the dispute resolution procedure under the licence agreement with a view to reaching an agreement through a more structured process.
“Imagination has reserved all its rights in respect of Apple’s unauthorised use of Imagination’s confidential information and Imagination’s intellectual property rights.”
To stay afloat, the chipmaker has announced that it intends to sell off its MIPS and Ensigma businesses.
Instead, it will concentrate its resources on its PowerVR business and strengthen its balance sheet.
“With continued investment, the group considers PowerVR to be 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,” the company said.
“Imagination will continue to make the appropriate investments in the PowerVR business.”