Running an IP licensing company, as we have noted in the past, can be lucrative – just take a look at ARM’s track record. But when it goes wrong, it can be hard to turn things around. It’s all about closing deals – and Imagination hasn’t been closing enough.
Imagination’s troubles appear to have been developing for a couple of years. Long time chief executive Sir Hossein Yassaie was ditched in February 2016, followed by the inevitable ‘cost cutting’ exercises.
But what might have been the coup de grace was Apple’s decision to stop using Imagination’s PowerVR graphics technology in its phones and tablets in favour of ‘rolling its own’. Shortly afterwards, a bunch of Imagination people suddenly showed Apple as their employer on their LinkedIn profiles.
The move frightened the market, with shares dropping at one point by 70% in a day.
So, what now for Imagination? According to the company, it decided to put itself up for sale because interest had been shown by ‘a number of parties’. Who could they be?
Chinese technology group Tsinghua has recently taken a 3% stake in Imagination, while Google and Qualcomm are also being mentioned.
But what about Apple? The consumer electronics giant still holds an 8% stake in Imagination and the two companies remain in dispute. Imagination believes that Apple won’t be able to develop its own graphics IP without infringing its patents. A simple solution for Apple would be to buy the company.
