Can't we all just get along? Call me naive, but these companies don't look like rivals.
Intel has teams(s) designing CPUs for production and placement in embedded/handhelds.
Apple has team(s) designing CPUs for production and placement in embedded/handhelds.
Is there 100% overlap in their businesses? No. Is there 0% overlap in their businesses? No.
That doesn't mean they can't still be partners in other aspects of the business ( e.g., Apple Microsoft OS biz vs. MS Office for Mac OS
< until recently> , High end HP hardware/OS vs. low end HP hardware/Windows , etc. ). Once tech companies expand out into a broader sprectrum of efforts there is lots of these overlaps. )
What's Intel going to do? Decide the fate of Imagination Technologies and Apple's iPhone/iPod Touch by upping their stake in this company?
How about this scenario.... Intel takes Imagination tech and couples it to an Intel CPU/GPU combo. That's only package they'll sell: a combo of CPU/GPU. So Apple's investment in eventually building their own CPU (which would be coupled to a IMG product) is worth more or less at that point? Intel has never used packaging to help squeeze another player out of the market? *cough* Nvidia.
Besides this can just be a move to get paid on the part of both parties. If Imagination Tech is very successful over the next 2-3 years the stock price could go substantially higher. At that point Apple ( and perhaps Intel ) sell off at a profit ( or the company gets bought out at a high price and they get paid. ) A fraction of both companies multibillion cash equivalents are invested in stocks. All of it isn't stuffed into grandma safe T-bills.
If you look at a three year chart of IMG back in 2007 the stock was higher than it is now. ( iPod halo to some extent. What think a iPod + Palm (Pre + others) halo might look like 2-3 years from now? ). Similarly, IMG can't do a large stock buy back to boost the share price. In some since Apple just did it for them. If that makes IMG a healthier company to deliver significantly better product reliably in the future it pays off. (If Apple says "go do R&D" in this direction... they are going to say 'no' now? )
At 9.5% Apple could press for a rep on the board if they want. That way would get slightly better than normal investor head's up on any buyouts maneuvering. Also have a head start of figuring out if higher counter offer is worth paying for.
Apple doesn't need to buy IMG right now. Nvidia might get dramatically cheaper between now and time they might need to. Right now it is probably best kept independent (from Apple's perspective). This move will help assure that.
