Apple purchases more Imagination

Making news in the financial world today is the story of a small UK based chip designer who is being regarded by technology giants Intel and Apple as an integral investment.

Imagination Technologies is based on Hertfordshire and is currently worth £240 million. They are a semi-conductor designing group which engineers chips that are found in portable devices such as laptops and smartphones.

Last week, Intel purchased £20 million worth of shares ($25 million USD), increasing its stake to slightly less than 14%, and more recently increased that stake to slightly over 16%.

Today, Apple announced that it is raising its stake in the company to 9.5% by purchasing 2.20 million new shares.

"I think they just want to feel safe and protected," CEO of Imagination Technologies, Hossen Yassai stated.

When asked about the recent influx in stake purchasing, Arun George, an analyst at Noble Securities stated: "The stake is to make sure it [Imagination] doesn't fall into a competitor's hands."

The key piece of technology being warred over is Imagination Technology's graphics interface. The Financial Times states that the innovation sparking the financial interest is that while most graphic technology treats the screen as one piece of data, increasing in density as the pixels increase thus leading to a requirement of more processing power, the innovation at Imagination Technology breaks the screen into smaller pieces, treating the screen as smaller divided components rather than one entity. This results in less processing power needed to utilize the display.

Such a technology is of interest to both Intel and Apple as they emerge ever deeper into the mobile and TV markets, and securing it from rival companies by purchasing defensive stakes is a top priority. Though purchasing the company entirely may not be a wise idea.

"As for now, it would do more harm to buy Imagination," George stated. The analyst believes that it would lead to the two tech giants into a "tit-for-tat" war, resulting in buyouts of vita intellectual property assets.

The Financial Times also stated that Imagination Technology expects to see an increase in royalty revenues after NEC this year.

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For info: These are the guys responsible for the PowerVR graphics architecture that featured in the Sega Saturn and graphics chips back in the 3dfx Voodoo days (it was a rival). Seems they didn't keep pace in the PC arena so they switched to the mobile market and consequently the tech is used in the iPhone.