Apple's ongoing use of ImgTec PowerVR GPU IP

Discussion in 'Mobile Graphics Architectures and IP' started by tangey, Apr 3, 2017.

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  1. Malo

    Malo Yak Mechanicum
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    I'm sure the chip itself will also have the appropriate rounded corners. :grin:
     
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  2. dinghh

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    That seems to be the consensus. They wouldn't want to find out they can't make something competitive and be forced to go back to Imagination. So these years of development must have yielded a competitive product. Maybe in 18 months they'll have something better.

    From what I've heard, an acquisition by Apple was the best way out (I'm talking about late 2016), given the debt and continual losses. Hostile takeovers are very much still a thing (Vivendi + Ubisoft, for example). As a non-expert, I'm under the impression a purchase would not be legal. Plus, the EU and EC would frown upon it, and it could be problematic.
     
  3. tangey

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    Total conjecture on my part, but it's possible that the end was on the horizon for the current licence/royalty agreement between IMG and Apple, and therefore IMG was starting into negotiations for beyond that, and Apple told them they would no longer be a licensee at that time.
     
  4. dinghh

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    I remember that Imagination renewed their contract in either 2015 or 2016 (I may be wrong). I can confirm that IMG was hard to negotiate with - this may have been a major contributing factor to the relationship's demise.
     
  5. Lazy8s

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    Unfriendly takeovers aren't ideal when a primary goal of the acquisition is to gain the talent/staff of the target company. Sure, lots of engineers would've stayed anyway, but they could still end up losing some key personnel as a result. Apple was not as interested in acquiring the rights to the current technology as they were the team and their ability to continue creating those leading edge designs.

    Besides the graphics, I've been wondering about the video encode/decode cores, too, since first reading IMG's statement. Those are also not trivial to replace, as the design of Imagination's cores allowed for an exceptional balance of quality and efficiency which have, at times, allowed for differentiating features, like the ability to record at 4K without an artificial limit on video length which some competing phones had to do to prevent overheating.
     
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  6. dinghh

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    Exactly. If Apple wanted the IP, they'd have acquired IMG. This also implies they are confident enough in their IP to be competitive, and/or have something very different in mind.
     
  7. tangey

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    IMG announced today they are selling MIPS and Ensigma, flagging it as directly a result of Apple's announced on the 4th of April, in which they stated they would not be using any IMG graphics IP. No progress has been made, and IMG has triggered the dispute resolution process that is in the license agreement.
    https://www.imgtec.com/news/press-r...ocedure-and-planned-sale-of-mips-and-ensigma/

    So for all of IMG's bluster in their initial response, it's clear this is an immediate attempt to downsize with an expectation/fear of a major reduction in future income.

    MIPS ended up being a $100M+ acquisition diasaster + loses since they bought it. Ensigma, has probably cost something similar over the years, given that they only recently flagged that they could see a breakeven point in the future for the first time. Dial in the $100Ms thrown at the radio making business (PURE), and countless other projects and joint ventures that only ever cost money (frontier silicon, greenplug to name just two that come to mind), and it's not hard to see that IMG have basically managed to lose many $100Ms in every major non-graphic strategic business decision in the last 10+ years.

    I recall that many years ago, IMG stated they could not get not compete with mali at the low-end, as it was not viable and they'd lose money in doing so. The folly of that decision is plain to see. IMO It would have been far better to have racked up loses in an overall profitable graphics division, and hence build a customer base and enlarge the division, than it would have been to lose money in tangential technologies or complete wacko divisions like PURE.

    It is worth noting that last week Qualcomm announced that Apple had stopped paying any royalty to them until their current dispute is settled, with Qualcomm downgrading their next quaterly forecast by $500M as a result. The situation is different, in that Apple is saying the royalty is too big to Qualcomm. Apple's position with IMG is that they are saying their new IP will not result in any royalty payments to IMG in approx 18 months times. That shouldn't impinge on existing IP royalty payments, however one fears for IMG if Apple take an approach of withholding payments pending the outcome of the dispute process.....
     
  8. Entropy

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    The dispute between Apple and Qualcomm is about royalty fees explicitly with money being withheld by both parties pending a resolution.
    There has been no reference to any fiscal dispute between Apple and ImgTec of that kind.
     
  9. tangey

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    Well fundamentally this dispute is also about royalty fees, Apple says it won't be paying them, IMG disagrees. I did say it's not the same as the Qualcomm scenario, but it's not entirely different either.

    On 3rd of April IMG released a press released which said
    and went onto say:-
    and
    Apple says they won't be paying, IMG doesn't agree. IMG opened discussions about the current license and royalty agreement. I think it's a fair assumption that those discussions were fiscal in nature.

    Today IMG is saying that those discussion have gone nowhere, so they have activated the dispute resolution that's in the agreement. Without knowing the details of the terms of that procedure, or indeed how Apple will view it, (and as we know Apple has demonstrated it views things differently from IMG), we don't know what Apple's response will be to a formal dispute process being activated, as opposed to merely having discussions.

    In the current scenario where IMG have clearly been entirely blindsided by Apple, to the point that they have announced disposal of two divisions directly as a result of this, I'm not sure anything can be taken for granted.
     
    #89 tangey, May 4, 2017
    Last edited: May 4, 2017
  10. Entropy

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    Lets clarify: Apple says that they won't be using IMGs IP, and will therefore cease to pay license fees for it within a certain time span. There is no dispute about the size of the fees they are currently paying, nor any withholding of funds. Apple has simply given notice that the current arrangement will not be prolonged beyond a certain point.

    In their first response, and as you quote, IMG stated that they believed it difficult for Apple to go forward without infringing on their IP.
    For me, this appeared to be share holder damage control, holding out hope that they could still extract (reduced) licensing fees from Apple in the future. Note that IMG "believed" that Apple would find it difficult to move forward without infringing. Apples engineers and lawyers apparently felt and feel otherwise. The fact that they are selling off parts of the company, referring to Apples withdrawal, seems to imply that their "belief" in not very strongly held anymore, if it ever was.

    It is also telling that they are very vague as to what the subject of this "dispute resolution procedure" is. (He:"Damn it, you can't do this to me!" She:"Yes I can." He:"Nooooo!")

    Speaking as an innocent bystander, speculating on what has been going on behind the curtains, I would guess that Apple would have preferred to simply acquire IMG and their IP. It would probably have simplified some design aspects, let them support IMG specific techniques going forward and so on. Smoothened the process of both design and software compatibility going forward. When that didn't work out, they implemented plan B instead, accepted whatever workarounds that had to be implemented, accepted that some techniques would have to be depreciated and perhaps that some fixed functional blocks (such as video codecs) would have to find in-house solutions. Once that bullet was bit, it was completely game over for IMG. Apple no longer needed them for anything. Once they had their stamp of approval from engineering team and lawyers, they sent their notice to IMG with a time frame that gave them margins for any SNAFUs that might hit them going to product.
    I find it difficult to believe that this came as a total surprise to IMG leadership. Apple have openly recruited to a graphics team with the express purpose of developing "world class IP", nobody at IMG ever called them and asked what that was all about? Apple also had discussions with IMG about ownership that surely must have included a fair bit of information about what Apple was interested in and why, and how it would affect IMG going forward. So it is difficult not to interpret what has come out of IMG PR as directed to scared and frustrated share holders, wanting to demonstrate that the current leadership is doing what they can to protect the interests of the owners.

    I share your view on dubious diversification vs. doubling down on your core strength.

    It has always been a pleasure and privilege to have IMG employees here, giving glimpses of insight into industry and technology! I hope they are all doing well in insecure times.
     
  11. Rodéric

    Rodéric a.k.a. Ingenu
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    Selling MIPS is a bad move, IMG needed to be able to design whole SoC with only its own technology...
     
    #91 Rodéric, May 4, 2017
    Last edited: May 4, 2017
  12. Rootax

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    Have they designed a SoC (with mips inside, and used by someone) since they acquired them ?
     
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  13. ToTTenTranz

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    Not IMG per se, but back in 2015 the company promoted a development board with a SoC developed by Ingenic that had 2 MIPS cores and a SGX 540 GPU.

    To put things in perspective, the SGX540 had been used in the Galaxy S' Hummingbird SoC in 2010. It wasn't exactly using state-of-the-art technology.
     
  14. tangey

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    AFAIR, the last round of paring down included closing the SOC design segment (IMG systems/IMGworks ) ?
     
  15. Ailuros

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    With MIPS and Ensigma gone there's hardly anything left but PowerVR in the end.
     
  16. Nebuchadnezzar

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    The opportunity for that has long past. ARM CPUs have won the mobile SoC market where you'd want a GPU in. MIPS is prevalent in markets where you don't need GPUs. You could make some argument for automotive but that's just niche.
     
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  17. wco81

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    I thought one difference between Qualcomm and IMG in their disputes with Apple is that the Qualcomm royalties are about FRAND licensing for standards-essential patents whereas IMG patents would not be.
     
  18. tangey

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    I share your amazement, but the fact is that the new-ish management had just finished going through a very severe paring down of the company, selling Pure (many years too late IMO but I digress), liquidating holdings in partner companies that they had shares in, and getting rid of many sub divisions such as IMGworks, with the stated aim of going back to 3 core divisions, graphics,Ensigma and MIPS. And having just done that, they apparently are now rushing to get rid of MIPS and Ensigma, tying it entirely to the Apple news. It would require an unbelievably devious management to deliberately do two phases and use a false 'surprise' as justification for the 2nd phase.

    The conclusion, which is in itself is quite shocking, is that indeed IMG had no knowledge that a hard 'Apexit' was on the horizon as little as 15 months away.
     
  19. Entropy

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    I shouldn't have written that I found it "difficult" to believe. I should have written "impossible".
    It's almost a year since (previous ImgTec COO) John Metcalfe started working at Apple, a year and a half since their VO of hardware engineering went over, so not only has rank and file engineers seen the job listings, but top leadership as well. It has been covered in news as well, such as this article in Business Insider last October. So barring wrapping Tower Bridge in a giant ad proclaiming that Apple are making their own graphics solution, it couldn't have been more clear.
    So surprise should be impossible. For us layfolks, the timing might have been less clear, but hell, I wrote about this here at B3D in October 2013 for Chrissakes!

    The writing has been on the wall in Really Big Letters.

    Quick Edit - this was the job description for a position Apple wanted to fill that I referenced back in 2013:
     
    #99 Entropy, May 5, 2017
    Last edited: May 5, 2017
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  20. sebbbi

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    I'd assume the only surprise for IMG was that Apple didn't license any of their IP. They must have known for long time about Apples plan to build their GPU, but I'd assume they believed to still get some IP licensing royalties out of Apple.
     
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