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9 January 2020

Graphics demands bring Apple crawling back to Imagination

Apple’s whims can make or break a supplier, as Imagination Technologies, Dialogic and even Intel’s modem unit know to their cost. However, the iPhone maker’s bid to develop as many components as possible inhouse is not without its own risks, and it looks as though it cannot entirely do without Imagination after all.

The UK provider of graphics processor (GPU) IP was forced to sell off several units and refocus its activities in 2017, after Apple said it would no longer need to license Imagination’s technology but would develop its own GPUs for the iPhone and other devices. But now, the companies have signed a new multiyear agreement for Apple to access a “wider range of Imagination’s intellectual property”.

There have been reports that Apple has been unable to replicate all the functionality of the GPUs it bought from Imagination, and it may well be taking a long hard look at its cost base and supplier strategy as the iPhone suffers from falling sales. Developing and maintaining inhouse technology gives a vendor control and differentiation, and a guaranteed supply, but it is also very expensive, especially as the demands for graphical quality and functionality in mobile devices rises by the year.

And that investment only pays off if the vendor can genuinely produce something superior to its suppliers – a lesson Apple learned painfully when it broke ties with Qualcomm for modems, but was then forced to make peace with the chip giant when its Intel 5G partnership failed to deliver the goods.

When Apple decided to go it alone in graphics, Imagination sold off units such as MIPS, and was itself acquired by Chinese-backed private equity firm, Canyon Bridge, for £550 million ($717 million), a steep fall from its peak valuation of over £2 billion ($2.6 billion).

But now Apple is back, just weeks after Imagination launched the “most important GPU for 15 years”, as CEO Ron Black boasted, the A-Series.

The terms of the new licensing deal are unclear, apart from applying to that “wider range” of IP. Imagination offers rights to several technologies apart from GPUs, including AI cores and connectivity IP for baseband and IP. The firm was the UK’s tenth most active patent applicant in 2018, with 64 European applications.

The statement said the new arrangement “replaced the multi-year, multi-use license agreement with Apple… with a new multi-year license agreement under which Apple has access to a wider range of Imagination’s intellectual property in exchange for license fees.”

Imagination was, to some extent, a creation of Apple, which was a shareholder in the company as well as a long-time user of its graphics technology. They had worked together since the original iPhone and Apple accounted for about 50% of the smaller firm’s revenue in 2017, despite its efforts, in the run-up to that date, to diversify into CPUs and connectivity (with the acquisition of MIPS and Ensigma, later put up for sale).

Imagination, and many others, questioned whether Apple would be able to design its own GPU technology without recourse to Imagination’s IPR, emphasizing how difficult and expensive this process is.

Former CEO Andrew Heath told investors at the time that “we don’t accept Apple’s position” that it could build its own system.

But in the three years since, not only have new iPhones failed to shine as much as older models, but Imagination has leapt ahead in terms of the graphics capabilities it can support, culminating in the Series-A launch.

Some of its recent innovations may have caught Apple’s eye. For instance, in May 2019, it said it would open up its PowerVR ray tracing IP, which had until then been used only in its own products, for third party licensing. It said this would extend its adoption via companies which could use it for emerging 5G applications that require high quality graphics rendering with very realistic effects of light and shade. These have traditionally required huge amounts of compute power but Imagination has reduced complexity and power to support mobile applications.

In an interview with EETimes last year, Imagination said that ray tracing would enable extremely realistic image rendering, using light modelling techniques, which could be integrated into the GPUs and applied to mobile, automotive or cloud applications.

The PowerVR architecture supports the processing of billions of rays per second (gigarays) and lowers the power consumption of the technique. The IP can be used to add realistic ray-traced light, shadow and transparency capabilities to traditional GPUs, or for dedicated solutions.

Just as Imagination dominated mobile GPU core IP – until ARM challenged it with its Mali platform, and Apple defected – so it looks poised to try the same again, this time targeting 5G graphics rendering. And ray tracing is increasingly prominent – Intel included the technique in its Xe architecture roadmap last year, and ray tracing will be supported by the Intel Rendering Framework.

Imagination said that it had invested significant sums in the technology, but then paused the development because there was no ecosystem – “but now the market has caught up”.  Nigel Leeder, EVP of PowerVR, said: “Ray tracing today is where 3D graphics were just before we first introduced PowerVR GPUs for mobile. The solutions in the market are fine for PC and console, but don’t offer the efficiency for mobile, augmented reality, or automotive applications.”

The company holds over 220 patents and applications based on its ray tracing technology.