Fri, 05 May 2017 | BUSINESS SALE
British graphics chip designer Imagination Technologies is to sell two of its three major businesses as it gears up for a dispute with Apple.
The Hertfordshire-based firm said in a trading update it will “actively market” its MIPS and Ensigma businesses as it looks to restore its balance sheet.
Last month, iPhone maker Apple said it planned to stop using Imagination’s technology in the next two years in order to build its own.
Imagination has been a long-standing Apple supplier and its tech features in every iPhone and iPad. Imagination relies on Apple for half of its revenues, so the announcement has been a real blow to the firm.
In response, and after being “unable to make satisfactory progress with Apple today regarding alternative commercial agreements”, Imagination has formally started a dispute process with the tech giant. While not a legal action it is a process for reaching an agreement under contract.
To mitigate the potential loss of its flagship customer, Imagination is to break up, selling Ensigma and MIPS to allow it to focus on PowerVR, its graphics chip division.
MIPS is focused on the embedded processor markets, where it has a strong position, particularly in the automotive industry, and completed a number of deals with major customers during the last financial year.
Ensigma offers IP licensing for connectivity in mobile computing, unmanned systems and internet-of-things.
“Since 3 April 2017, the Board has reviewed the composition of the business,” Imagination said in a statement.
“While the group has continued to invest in its MIPS and Ensigma businesses, it has now decided to actively market these businesses for sale, concentrate its resources on PowerVR, and strengthen Imagination’s balance sheet.”
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