Apple's ongoing use of ImgTec PowerVR GPU IP

[tangey]

https://www.imgtec.com/news/press-release/discussions-with-apple-regarding-license-agreement/

"Imagination Technologies Group plc (LSE: IMG, “Imagination”, “the Group”) a leading multimedia, processor and communications technology company, has been notified by Apple Inc. (“Apple”), its largest customer, that Apple is of a view that it will no longer use the Group’s intellectual property in its new products in 15 months to two years time, and as such will not be eligible for royalty payments under the current license and royalty agreement."
Etc....

The rest of the statement is basically img saying they suspect it's not possible for Apple to do the above without infringement

The very first thing that comes to mind is that Apple has used pvrtc from the start. It implies that in the stated timeframe, no new Apple products will be compatible with software that uses it.

But mostly I'm speechless.

 

[french toast]

I Wouldn't bet against apple using PVR tech and trying to not pay for it, unless it is a brand new architecture from the ground up it is almost certainly going to use someones ip, its unavoidable.
This also means a brand new driver stack, also you can guarantee within 5 years they will abandon x86 completely, my bet is 3 years.
Apple already has the engineering expertise to design a better cpu than intel/amd within 35w, i have no doubt about that.
Software will follow hardware, apple has the resources to do it.

 

[Mariner]

Share value crashed by 70% already.

What's the chances that Apple will end up buying ImgTech on the cheap in the future?

 

[Rodéric]

Surprising, yet somewhat doubtful, where would Apple get its patents from ?
There are a lot of GPU makers already and they all have plenty of patents preventing Apple from doing much in the field...
Could be a way to purchase IMG for cheap now ^^

 

[wco81]

Shares plunge on the news.

http://www.bbc.com/news/business-39476898

Apple going to roll something in-house which is cheaper and/or better?

Ah, I posted a BBC link in Mobile Industry.

Their most recent iPad is not pushing performance or thinness.

Maybe they're looking to fill the price bands between the basic iPad and the iPad Pro, which is almost double the price.

 

[Psycho]

I also suspect this a way to drive down the price of IMG before buying them. And then Apple can make their "own" "inhouse" graphics ip like they told

But the wording is a bit strange. If apple switches graphics ip provider (maybe to inhouse) they will of course no longer need the *current* licensing deal of complete PowerVR cores. But they will have to start licensing various patents (which I don't see them straight out denying). Maybe it is just IMG's way of emphasizing that they should still have a considerable revenue stream from apple in the future.

 

[tangey]

I also suspect this a way to drive down the price of IMG before buying them. And then Apple can make their "own" "inhouse" graphics ip like they told

But the wording is a bit strange. If apple switches graphics ip provider (maybe to inhouse) they will of course no longer need the *current* licensing deal of complete PowerVR cores. But they will have to start licensing various patents (which I don't see them straight out denying). Maybe it is just IMG's way of emphasizing that they should still have a considerable revenue stream from apple in the future.

The statement says that Apple's view is that they will "no longer use the groups IP in new products". If they needed to license patents then they'd still be using the group's IP.

Note that the statement is from IMG and is stating Apple's view, and IMG's position that they don't agree with it.

So, if this was the play all along, how come Apple (most unusually for them) put out a statement confirming they had been in discussions to buy IMG. If they don't need IMG, they would not have been considering buying. Have they just REALLY RECENTLY had proof of concept for their in-house stuff, or just decided that IMG will long be out of money before any court case is concluded.

I suspect that if Apple really is attempting to cut all ties with IMG, then a suitor with bigger pockets will buy IMG just for the graphics patent, assuming IMG have a good swath of patents that can be enforced. Samsung would have to be high up there, remembering that they gave up on their own in-house efforts.

 

[Mariner]

No surprise when the 800lb gorilla (or should that be $800 billion gorilla) starts to throw its weight around to get what it wants.

 

[Gubbi]

I suspect that if Apple really is attempting to cut all ties with IMG, then a suitor with bigger pockets will buy IMG just for the graphics patent, assuming IMG have a good swath of patents that can be enforced. Samsung would have to be high up there, remembering that they gave up on their own in-house efforts.

Bigger pockets than Apple ?

If it is a take-over maneuvre it is pretty risky one. Other companies could be interested:
ARM; Mali could use a high level boost to compete with Adreno in perf/power.
Samsung; Long term strategy is vertical integration, so fits there
Intel; Another 800 lb gorilla with a big GPU component in most of their SOCs.
Qualcomm; Prevent ARM and Samsung from getting it.

Starting from scratch would be like walking a patent-litigation minefield.

We sure this isn't an april fools joke gone too far ?

Cheers

 

[idsn6]

From all indications, IMG has been a near-perfect supplier/partner for Apple's biggest product lines for a decade, so it makes sociopathic sense that Apple would in turn poach much of their talent and pivot to kill them financially.

 

[Entropy]

https://www.imgtec.com/news/press-release/discussions-with-apple-regarding-license-agreement/

"Imagination Technologies Group plc (LSE: IMG, “Imagination”, “the Group”) a leading multimedia, processor and communications technology company, has been notified by Apple Inc. (“Apple”), its largest customer, that Apple is of a view that it will no longer use the Group’s intellectual property in its new products in 15 months to two years time, and as such will not be eligible for royalty payments under the current license and royalty agreement."
Etc....

The rest of the statement is basically img saying they suspect it's not possible for Apple to do the above without infringement

The very first thing that comes to mind is that Apple has used pvrtc from the start. It implies that in the stated timeframe, no new Apple products will be compatible with software that uses it.

But mostly I'm speechless.

Not speechless by surprise I hope, we discussed Apples Orlando GPU group and their clearly stated agenda long ago.
This has been several years in the making already. While it could be a negotiation tactic to aquire ImgTec at a lower cost than they were offered during their negotiations, it can also be that they were interested in aquiring ImgTec in large part to get around some thorny technology/patent issues that they now consider resolved well enough that they feel they can safely cut ties.

 

[tangey]

Bigger pockets than Apple ?

badly worded on my part, i meant someone with pockets big enough to fight a long expensive patent case. IMG doesn't have that wealth

 

[manux]

Apple has been openly recruiting people to make GPUs for very long time in linkedin. For one I'm not surprised they really are doing their own gpu. It's not like they started yesterday...

 

[tangey]

Not speechless by surprise I hope, we discussed Apples Orlando GPU group and their clearly stated agenda long ago.
This has been several years in the making already. While it could be a negotiation tactic to aquire ImgTec at a lower cost than they were offered during their negotiations, it can also be that they were interested in aquiring ImgTec in large part to get around some thorny technology/patent issues that they now consider resolved well enough that they feel they can safely cut ties.

Given the reaction of the markets, and the mood music from the IMG conference call this AM, I'm certainly not alone in being surprised that they are attempting to deattach totally from IMG.

It is also pertainent to mention that the recently departed Rys (from IMG that is) mentioned in his blog that he was leaving

...just before another probable growth spurt, as the company regains profitability and has new success in a growing customer base".

As someone who was better placed to get a feel of these things that most others here or elsewhere, it doesn't exactly sound like his expectations were for a profit-busting Apple-exit.

 

[Lazy8s]

This of course shows that Apple hadn't stopped using Imgtec's designs already, as was recently reported, not that such speculation ever made sense. It also doesn't make sense that Apple could or should go forward without buying out assets of Imgtec. They've been acquiring talent from them here and there, yet elements of the architecture are fundamental and foolish to try to work around.

This is definitely a very questionable decision by Apple. Potentially broad missteps like this can be a sign of poor direction from higher in the organization which would inevitably lead to more problems in more areas.

 

[french toast]

If this Isn't a precursor to a takeover then you have to wonder what apple are up to, IMG buy is pocket money to apple with massive benefits, i hope they dont do it but it makes sense.

 

[loekf]

I think the PR is IMG's way of saying: hey you pouched 35 guys from us a year ago (including John Metcalfe himself) and we finally figured out what they are doing over there.... don't use our patents or technology or we will sue the hell out of you. Of course you can always try to license our patents... of course for the original 60+ million GBP/year you would normally pay"

So in other words... IMG is ready for an IP war....

Based on the PR (press release) guess it's safe to say that the next incarnation of the A-SoCs ... so the A12 (mass production 2018) and A12X (mass production early 2019, if you follow Apple's typical release schedule of iPhone first, iPad later) will feature an in-house GPU. Not surprising IMG is pissed now, because I guess the next-gen A-series SoC is nearing its final layout in the next months, somewhere in Q3 ? So Apple has a three quarters for debug, test, re-spin etc.

Makes we wonder what they will do with some other product lines.... they could pair an A-series GPU with an Intel CPU provided the A-series GPU is much more powerfull than the Intel notebook on-die GPUs.

 

[Entropy]

Given the reaction of the markets, and the mood music from the IMG conference call this AM, I'm certainly not alone in being surprised that they are attempting to deattach totally from IMG.

It is also pertainent to mention that the recently departed Rys (from IMG that is) mentioned in his blog that he was leaving


As someone who was better placed to get a feel of these things that most others here or elsewhere, it doesn't exactly sound like his expectations were for a profit-busting Apple-exit.

Well, there was also the "good prospects short- to midterm" that Alex Voica wrote on departure that to me signalled long term doubts.

Whatever. We still don't know where this lands. ImgTec could go on, perhaps buoyed by some liscensing revenue. Or they could be bought and might thus find themselves funded by deeper pockets. Or they may be dismantled, IP and personnel moving on to other, hopefully greener pastures. It remains to be seen.

 

[tangey]

I think the PR is IMG's way of saying: hey you pouched 35 guys from us a year ago (including John Metcalfe himself) and we finally figured out what they are doing over there.... don't use our patents or technology or we will sue the hell out of you. Of course you can always try to license our patents... of course for the original 60+ million GBP/year you would normally pay"

You need to read the statement again, they didn't figure anything out, Apple has flat out told them. The three relevant words being "notified by Apple..."

 

[manux]

Why would apple buy imgtech? Probably easier to keep hiring people as they come and possibly pay some royalties after legal battles. No need to take any baggage imgtech carries.

I wouldn't be surprised if apple gpu was nearing production at this time. Assuming imgtech gets paid per chip the imgtech announcements reads 24 months from now Apple pays for 0 chips from imgtech and all products have been migrated to apple ip. Following apples previous silicon cycle this would pretty much mean next iphone doesn't use imgtech or apple phases out next iphone and next soc pretty rapidly.