Imagination re-wins Apple as customer

Almost three years ago, Apple decided it could get by without Imagination Technologies as a supplier, but 2020 gets off to a flier for the UK chip firm resigning a licencing agreement.

Details are thin on the ground for the moment, though this completes a very circular story for the Hertfordshire-based company. Imagination Technologies has now confirmed Apple has signed a multi-year agreement to access a “wider range of Imagination’s intellectual property”.

The original deal between the pair was signed in 2014, though it only took three years for Apple to decide it wanted to move operations in-house. This is becoming an increasingly common tactic for the iLeader, the acquisition of Intel’s 5G modem business is another example, though it seems Apple was not able to replicate the success of Imagination Technologies’ graphics cards.

Although Apple is still a highly profitable company, slowing growth and increased costs for the iPhone have presented a problem on the spreadsheets. As a result, CEO Tim Cook has attempted to supercharge the ‘software and services’ division to generate momentum, while bringing more of the supply chain in-house is another way to create efficiencies and profits. Imagination was a victim of the latter.

As a result of losing Apple as a customer, and more than half of the company’s annual revenues which were tied to the firm, Imagination Technologies saw its share price plummet 70% and eventually have to succumb to being sold to Canyon Bridge, a Chinese-backed private equity firm, for £550 million. At the peak of its powers, Imagination Technologies was worth more than £2 billion.

The agreement with Apple comes a month after the launch of the A-Series chipset, which Imagination Technologies CEO Ron Black described as the “most important GPU launch” in 15 years. This is of course little more than posturing from the CEO, though Apple clearly bought into the buzz, that or it figured out that designing and manufacturing GPUs is more difficult than it first thought.