It's all in your Imagination; Apple is not on an expensive shopping trip

Subject: General Tech | March 22, 2016 - 02:39 PM |
Tagged: apple, Imagination Technologies, rumours

Various sites have been abuzz this morning with rumours of Apple seeking to acquire the manufacturer of the PowerVR graphics chips they utilize, Imagination Technologies.  Apple has now flatly denied this rumour; which means simply that they have denied that they are making an offer at this time.  That makes sense regardless of the truth of the rumour, driving up the stock price makes the acquisition more expensive for Apple so a public denial makes financial sense whether they do plan to buy the company in the future.

It does make some sense to own your hardware provider and their patents, but it is not as advantageous as it once was.  Many companies have found outsourcing their manufacturing to make more sense financially, preferring to buy out competitors to gain market share and patents instead.  We will keep an eye out for any new developments but it does not seem likely that we will see a deal go through in the near future. 

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"From time to time, Apple talks with companies about potential acquisitions. We had some discussions with Imagination, but we do not plan to make an offer for the company at this time."

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March 22, 2016 | 03:53 PM - Posted by Anonymous (not verified)

Apple already owns about 10% of Imagination Technologies so if the stock goes up Apple also gets more value in those investments. Imagination Technologies has a lot of IP contracts that Apple would not be able to get out from under if they where to acquire Imagination Technologies so that may be why Apple would not be interested in buying them outright. Apple would sure intervene with cash help if Imagination Technologies where to slip into bankruptcy, probably long before Imagination Technologies would file, as Apple could not afford to lose such an important supplier of IP.

Apple has enough cash to become a lender of last resort to Imagination Technologies, so I would not be too worried about Imagination Technologies' financial problems, as they have made the proper moves to restructure and stay in business. Imagination Technologies is only a licensor of technology/IP so they have no chip/other production facilities to worry about, so they need to refocus their efforts on their core IP products and get rid of any R&D projects that are not necessary for their core IP product offerings.

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