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Thread: More bad news for Imagination Technologies compliments of Apple!

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    Admin Daniel Nenni's Avatar
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    More bad news for Imagination Technologies compliments of Apple!

    Wow, the question I have is, now that Market Cap is under $300M, who will come to the rescue Synopsys or Cadence or some patent trolls? It does not seem likely that Apple would buy them after all of this abuse. It would be a legal and PR fiasco, my opinion.

    And who is next on Apple's hit list? QCOM and Imagination are on the way out. How about NXP, Broadcom , Skyworks, Murata, Dialog, Cirrus Logic, TI? I guess the question is which of these chips will be consumed by the Apple SoC next?

    Apple to drastically cut royalties to Imagination Technologies, says UBS:
    • UBS says Apple will cut royalty payments to Imagination Technologies
    • Imagination Technologies provided graphics chips for iPad, iPod and iPhone
    • Imagination said earlier this month Apple is cutting ties over next two years

    Citing the UBS report, Reuters said Apple's decision to pay a decreased royalty rate — 10 cents compared with the current 30 cent rate — to Imagination would "become loss-making by fiscal 2019." That move could simply prolong the death of Imagination Technologies. It could also open it up for an outside acquisition.


    http://www.cnbc.com/2017/04/19/apple...ng-to-ubs.html

    http://video.cnbc.com/gallery/?video=3000611399



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    Daniel, I think you are getting ahead of the facts and probabilities, by stating "QCOM is on the way out" of Apple. On the chip side, are you suggesting that Apple can continue to overcharge for lagging-edge modems, and become reliant upon Intel's sketchy capabilities as a sole source? As carrier aggregation, LTE-U, and millimeter wave prowess become essential, can Apple really afford to cede competitive markets to less expensive products that are more technologically advanced? Even at this early juncture, Apple is having trouble competing in China against QCOM-equipped locals. The IPhone franchise is Apple, for without it Apple would be a shadow of itself. Betting the farm on antipathy towards paying unavoidable and inevitable royalties to QTL would be suicidal.

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    Admin Daniel Nenni's Avatar
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    Quote Originally Posted by JeffreyHF View Post
    Daniel, I think you are getting ahead of the facts and probabilities, by stating "QCOM is on the way out" of Apple. On the chip side, are you suggesting that Apple can continue to overcharge for lagging-edge modems, and become reliant upon Intel's sketchy capabilities as a sole source? As carrier aggregation, LTE-U, and millimeter wave prowess become essential, can Apple really afford to cede competitive markets to less expensive products that are more technologically advanced? Even at this early juncture, Apple is having trouble competing in China against QCOM-equipped locals. The IPhone franchise is Apple, for without it Apple would be a shadow of itself. Betting the farm on antipathy towards paying unavoidable and inevitable royalties to QTL would be suicidal.
    Actually, I was told at the high end Huawei is the real threat to Apple in China and they make their own chips. Oppo and others are selling on price versus "the customer experience".

    Yes I do think the new Intel modem will be in the iPhone. It is made on TSMC 28nm and TSMC is forecasting 28nm growth while traditional 28nm customers are moving to 16nm and UMC/SMIC are shipping a lot of 28nm wafers that are TSMC GDS compatible. If not the Intel modem, where is this 28nm growth coming from? That's my guess anyway.

    I also had a long conversation with a legal friend that is following the QCOM case very closely and he thinks Apple is out for a pound of flesh and will ultimately get it and more. Not to mention the exposure it will bring to other QCOM customers and regulatory agencies.

    One thing you should know about the semiconductor industry is that it is filled with extremely smart people with very big egos. I have been personally involved with industry legal spats and have seen some crazy "in the heat of the moment behavior" that has literally destroyed companies. I also got the inside scoop on the spat between Apple and IMGTEC and it is yet another example of irrational business behavior.

    Just my opinion of course.

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    I actually think QCOM would be the ideal buyer.

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    Quote Originally Posted by count View Post
    I actually think QCOM would be the ideal buyer.
    I'm not sure about that unless it would be a patent play. QCOM certainly knows how to license IP! QCOM did pay a hefty price for Arteris patents, technology, and people so you never know. It would also give them a good reason to take patent infringement action against Apple.

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    While your friend may think Apple will "get a pound of flesh", my own opinion is quite different. I'm only a curious follower of semi-conductor issues, but I do have 43 years of litigation experience. I'll take the other side of your friend's bet. That's what makes markets.

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    Quote Originally Posted by JeffreyHF View Post
    While your friend may think Apple will "get a pound of flesh", my own opinion is quite different. I'm only a curious follower of semi-conductor issues, but I do have 43 years of litigation experience. I'll take the other side of your friend's bet. That's what makes markets.
    Great, I would be interested in your opinion as well. Did you listen to the QCOM call? They said that other companies are withholding royalty payments. Some related to the Apple dispute and at least one ($150M) is not.

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    I did listen to the conference call. Aside from one unidentified licensee who withheld $150 mil from royalties (totally unrelated to Apple), only the Apple contract manufacturer licensees withheld monies, and the amounts they withheld were equal to the underpayments they received from Apple during the same quarter. That supports Qualcomm's counterclaim for "tortious interference with established contractual relationships", as the contractual obligations of the CMs to QTL exist independent of any contracts Apple has with those same entities. The CMs reported the actual amount they owed, but underpaid by the amount Apple owed them. If they underpay this quarter, now that the Qualcomm/Apple expired in December 2016, then I expect Qualcomm to file for binding arbitration, pursuant to their PLAs.

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    Quote Originally Posted by Daniel Nenni View Post
    I'm not sure about that unless it would be a patent play. QCOM certainly knows how to license IP! QCOM did pay a hefty price for Arteris patents, technology, and people so you never know. It would also give them a good reason to take patent infringement action against Apple.
    This is exactly why I think Qualcomm would be the best buyer. IP and legal positioning against Apple.

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    One thought: Would imagination be able to show infringement without access to internal apple information? Graphics APIs don't expose too many of the architectural details, and given that apple made Metal itself and OpenGL ES is widely used, I doubt there's anything at the API level that Imagination can go after in IP litigation. Forgive my ignorance, but am I correct in assuming reverse engineering a netlist from a decapped chip is practically impossible?

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