Imagination Technologies Shares Plummet After Apple Says It Will Develop Own Solution
April 03 2017 - 7:27AM
Dow Jones News
By Rory Gallivan
LONDON--Shares in Imagination Technologies Group PLC (IMG.LN)
plunged Monday after it said major customer Apple Inc. (AAPL)
planned to stop using the U.K. semiconductor company's graphics
technology in its new devices.
Imagination said in a stock-exchange announcement that Apple
would stop using its intellectual property in new products in 15
months to two years and would instead develop its own graphics
technology.
Shares in Imagination dropped by 60.3% to 107 pence in morning
trading, giving Imagination a valuation of 300 million pounds ($375
million).
Imagination said license fees and royalties from Apple totaled
GBP60.7 million in the fiscal year ended April 30, 2016, without
specifying how much of this was for graphics technology. Total
revenue for the year was GBP120 million.
Imagination designs technology for graphics processing units and
for central processing units, which power devices' more general
functions, such as storing data.
Imagination, whose technology is used in Apple iPhones and other
devices, said it would be "extremely challenging" for Apple to
develop its own new graphics technology without infringing on
Imagination's patents.
The companies are in talks about commercial arrangements,
Imagination said.
Apple declined to comment.
Apple, which has an 8.5% stake in Imagination, according to the
company's last annual report, last year confirmed that it had held
talks about buying Imagination but decided not to make an
offer.
Imagination is the largest remaining semiconductor designer on
the London Stock Exchange after its much bigger rival, ARM
Holdings, agreed to be bought by Japanese internet and
telecommunications conglomerate SoftBank Group Corp. for $32
billion last year.
Write to Rory Gallivan at
rory.gallivan@wsj.com<mailto:rory.gallivan@wsj.com>; Twitter:
@RoryGallivan
(END) Dow Jones Newswires
April 03, 2017 07:12 ET (11:12 GMT)
Copyright (c) 2017 Dow Jones & Company, Inc.
Imagination Technologies (LSE:IMG)
Historical Stock Chart
From Mar 2024 to Apr 2024
Imagination Technologies (LSE:IMG)
Historical Stock Chart
From Apr 2023 to Apr 2024