Apple GPU Supplier Imagination Technologies Announces Cuts Amid Slowing iPhone Sales

[MacRumors]

British microchip designer and major Apple supplier Imagination Technologies announced additional cost cuts this morning, following a significant restructuring program unveiled by the UK firm only last month.

The company, which supplies the PowerVR graphics architecture in Apple's iPhones and iPads, said it would reduce its cost base by an additional £12.5 million ($18 million) by April 2017, on top of the £15 million in cost cuts announced in February. Two hundred staff now face redundancy as a result, adding to the 150 job cuts announced last month.

Tough trading conditions and a slowdown in iPhone shipment growth is said to be behind the decision, after the company posted an operating loss for the year to the end of April.

"This swift and decisive action will put us back on a sound financial footing and will enable us to have the necessary resources to further strengthen our three core businesses," the company's interim chief executive Andrew Heath said in a statement. "The ongoing operational review will identify clearly where we need to focus, building on our current strengths and allocating the right capital to ensure growth and attractive returns."

Imagination Technologies has reported financial difficulties for several years, despite repeated expectations that iPhone sales would boost its revenues. Shares dropped 10 percent last year when the company reported a first-half loss, and nosedived as much as 18 percent when the restructure was announced in February. The company has also put its digital radio business Pure up for sale.

Apple has been a licensee and stakeholder in Imagination Technologies since at least 2008. The two companies have worked closely together over the years, with Apple being a key investor in the graphics firm since it raised its stake to roughly 10 percent in mid-2009. In 2014 Imagination announced an extended licensing agreement with Apple. However, it has been under pressure to reduce its dependence on Apple since at least 2012 because of declining average royalty rates.

Imagination announced the next iteration of its PowerVR Rogue graphics architecture at this year's CES in January. The PowerVR Series7XT Plus builds on the Series7XT GPU used in the iPad Pro, with a focus on improved camera and vision processing capabilities for photography-based applications.

It remains to be seen whether the new chips will appear in Apple's rumored 'iPad Pro' branded 9.7-inch tablet set to launch next week, the iPhone 7 expected this September, or indeed in any other future Apple devices.

Article Link: Apple GPU Supplier Imagination Technologies Announces Cuts Amid Slowing iPhone Sales

 

[farewelwilliams]

apple is _______________

 

[maverick808]

apple is _______________

DOOOOOOOOOOOOOOOOOOOOOOOOMMMMMMMMMEEEEEEEEDDDDDD!!!!!!

 

[Mac Fly (film)]

Apple is d00med.

 

[Juan Andrés]

Apple should buy Imagination. They already have the 10% of the company.

 

[bladerunner2000]

Apple should buy Imagination. They already have the 10% of the company.

Why do so many members on MacRumors have this idea that Apple should just buy everyone?

 

[iMember]

GPU GATE! next year CAMERA GATE

 

[arubinst]

Why do so many members on MacRumors have this idea that Apple should just buy everyone?

Apple should buy me. I already have almost every product they make.

My house looks like an Apple Store

 

[Max(IT)]

I don't like this kind of "journalism"... Imagination Technologies is in financial troubles since 2012. This has nothing to do with expected slowdowns on iPhone sales in the actual quarter.
It's just a clickbait.

 

[iMember]

Why do so many members on MacRumors have this idea that Apple should just buy everyone?

This time does make sense to buy this company, it's also gonna be cheap for Apple..I think will be around $200 millions
Edit: I thought is also manufacturing their own GPUs like Intel does, wow! all this time i had no idea, well in that case is not worth buying it

 

[Juan Andrés]

They're doing their own CPUs, the next step is the GPU.

 

[Bhatu]

They're doing their own CPUs, the next step is the GPU.

They created Metal -- Now its time to reinvent GPU!

 

[Crosscreek]

Saturation is a bitch.

 

[diddl14]

If they would have just negotiated 10c more per license...
[doublepost=1458214338][/doublepost]

Apple should buy me. I already have almost every product they make.

My house looks like an Apple Store

Including glass stairway?

 

[iMember]

I don't like this kind of "journalism"... Imagination Technologies is in financial troubles since 2012. This has nothing to do with expected slowdowns on iPhone sales in the actual quarter.
It's just a clickbait.

It could be because of Samsung Galaxy S7 Edge

 

[Max(IT)]

They're doing their own CPUs, the next step is the GPU.

they are designing their own SoC ... quite different from actually doing it (the foundries still are by TSMC and Samsung)

 

[Benjamin Frost]

The smartphone market has matured.

 

[Loge]

So many flops in that picture, no wonder they're not doing well.

 

[cwt1nospam]

Can someone explain how a "slowdown in shipment growth" results in cuts? Even if they've been over producing, continued growth in sales means that current production levels will be overtaken by demand at some point in the not too distant future.

 

[HobeSoundDarryl]

See #17 above. "Slowdown" and "shipment growth" is spin so that they don't have to talk to slowing iPhone sales growth and potentially feel added wrath from Apple. The implication is that they are looking forward and seeing less iPhone sales growth AND optimizing their internal processes so they need less staff (or just trimming some "fat" and loading up on those who get to keep their jobs).

I wouldn't spin "doomed" messaging so much as pointing to the need for Apple to diversify their revenue dependencies around to other products- existing or entirely new. New iPhone models should continue to sell very, very well and generate a ton of year over year profit too. But meaningful growth of revenues & profits is probably going to need to be coming from some other products and/or services.

Before the ADF is activated, that's not saying "doomed" or that iPhones won't sell anymore. This is about sustaining amazing growth gains year after year, NOT that nobody wants to buy iPhones anymore. This is actually quite normal in business & product cycles. No company- even Apple- can defeat gravity forever.

 

[Tycho24]

Apple should buy Imagination. They already have the 10% of the company.

Ummm.... yeah.
Soooo.... if a company is in financial distress & has been for years; Apple should scoop them up? Lol.
I'm sure that made more sense in your head.
[doublepost=1458220118][/doublepost]

Why do so many members on MacRumors have this idea that Apple should just buy everyone?

Sheer ignorance.

 

[dsmedic10]

they are making cuts based on perceived iPhone slowdown of sales in 2017? That's their reasoning?

 

[You are the One]

The company, which supplies the PowerVR graphics architecture in Apple's iPhones and iPads, said it would reduce its cost base by an additional £12.5 million ($18 million) by April 2017, on top of the £15 million in cost cuts announced in February. Two hundred staff now face redundancy as a result, adding to the 150 job cuts announced last month.

This is an example of numerical naiveté. Numerical naiveté is not a failure with arithmetic, but instead a failure to know how to the use the basic tools of arithmetic to understand data. It's a common mistake most news outlets make. Lots of data is presented but little information can be extracted from it.

The presented data needs to be put in context to e.g. revenue and the total workforce, over years of time, to give actual information.

There is an excellent book written by Donald J. Wheeler, Understanding Variation the Key to Managing Chaos, highly recommend to anyone dealing with analysing or presenting data to give information.

 

[meaning-matters]

The logo does not show imagination.

 

[cwt1nospam]

I wouldn't spin "doomed" messaging so much as pointing to the need for Apple to diversify their revenue dependencies around to other products- existing or entirely new.

Need? Given that their non-IOS revenue and profit (Mac, iTunes, etc.) are greater than many of their competitors entire revenue/profit, I wouldn't say need. Desirable, sure, but not need.