Imagination Technologies Share Discussion Threads

[sheep_herder] 15/5/2017 12:02

The Orlando link was just an example Pottsey, one which I think was opportunistic to grab a few AMD guys. They were recruiting into their main offices as well.

You also don't seem to appreciate how long these plans take to form. Thinking the UK office is purely responsible for this non-IMG GPU is beyond funny.

Just showing your lack of knowledge. As most of your posts do to be fair.

[pottsey] 15/5/2017 11:46

Sheep_Herder said “Pottsey, just because Apple took 3 years longer than I initially expected I'm suddenly wrong am I? Funny.”
I was just trying to explain why so few people listened. It’s not just that Apple are going to take 3 years longer then you initially expected. You was also wrong on Apples custom in house GPU every year for 3 years.

Yes it was no secret that Apple was recruiting and building a GPU team. But you said that initial team formed to create a custom in house GPU based without IMG IP. What came out of that team from back in 2013 was the opposite of what you said being an in-house GPU based on IMG IP. Your old speculation was wrong and you are acting like now the situation has changed that it was right.

It seems to me that you where speculating about Apple leaving IMG IP years before Apple made any plans. Apples London GPU development team to move away from IMG IP didn’t get formed till years after your speculating started. You were speculating about this years before there was any evidence and possiblely years before Apples themselves had plans. That Orlando office is working on inhouse GPU's based on IMG IP. Its the london Office that is the new team.

[sheep_herder] 15/5/2017 11:25

Rob. Let me help you. When you start hiring a new team, you start with the architects. Who do you think they hired into that Orlando office? Tea ladies?

You seem to want to be spoon fed.

[rob_evans] 15/5/2017 10:59

Sheep_Herder "What? I need to write an article on the web to confirm what I knew back then?"

And another irrelevant link. I know all about the Orlando stuff - I was posting about it on here at the time.

What you never said was that Apple had hired GPU architects from Nvidia and Vivante - all we got from you was speculation with no evidence.

As I said, it is no wonder you were ignored.

[sheep_herder] 15/5/2017 10:38

Oh my god. You guys are dim as can be.

Pottsey, just because Apple took 3 years longer than I initially expected I'm suddenly wrong am I? Funny.

Rob. What? I need to write an article on the web to confirm what I knew back then? It was no secret within the industry that Apple were recruiting and building a team. Go and look back at the articles around that time:

Dear me.

[taffy100] 15/5/2017 10:33

Sondrel Agrees to Acquire IMG Works Division of Imagination Technologies

[rob_evans] 15/5/2017 10:16

Sheep_Herder > "Rob_Evans, do you know what's funny about you posting that link to Ashraf from 2015? The fact that I was telling you lot the same thing from as early as 2013."

Wow, what a self-delusional post!

The Ashraf article I linked to specifically mentioned that Apple had hired GPU architects from Vivante and Nvidia. That was the key information that proved Apple were designing their own GPU.

Your post was just speculation that Apple were designing their own GPU, with absolutely no evidence provided - no wonder people ignored it.

[richardc77] 15/5/2017 09:43

If there was a takeover rumour it would see the share price up much more than 3%...

[ny boy] 15/5/2017 09:26

Takeover rumours, according to the boys down on the Canary wharf trading desks but could be Monday morning boredom after another hedonistic weekend.

[pottsey] 15/5/2017 08:27

Sheep_Herder the reason so few people listened is you were wrong for 3 years going onto 4. You kept going on about Apples in-house GPU was going to abandoned IMG and then the first in-house Apple GPU came out opposite to what you said making it very hard to believe you. Next year you said the same thing was going to happen in the following year and again the 2nd generation in-house GPU came out and was based on IMG IP. 3 years later from that post and lunch product your post referred to is the Apple in-house FUSION GPU still based on IMG IP. Now it turns out the 4th, 5th and possible 6th year are also going to be in house Apple GPU's based on IMG.

It reminds me of the story of the boy who cried wolf. You might end up being right 6 years after the post when we might get a lunch product without IMG IP. But all those years of calling out and being wrong made people not listen. Yes you did warn us but look at what you said and look at what happened. The in house GPU you talked about lunched and still contained IMG UP so after years of your warning being wrong many people stopped listening. If you makes you feel better some of us did prepare for this possibility

[stoxx67] 15/5/2017 07:05

not about who they can hire, its about what patents they infringe..

IMG will negotiate a large settlement from Apple IMHO, but it will certainly take a little time to do so.

[luckymouse] 14/5/2017 22:14

Apple is the richest co in the world with a cash mountain so large it's beyond comprehension - they can afford to buy a small country or two if they so pls - what on earth makes you think they can't hire world class GPU talent??

[timbob2000] 14/5/2017 15:41

Just wanted to remind all remaining IMG holders here of an opportunity that should not be overlooked, an opportunity that could become important to IMG's survival. Late last year Microsoft announced that they will be releasing a future update to Windows which brings x86 emulation of all Win32 software on ARM processors. This means later this year you will be able to purchase a laptop that comes equipped with a Qualcomm Octacore chip that will run all Win32 software, and run it 'almost' as fast as an Intel powered device. I think this coud open up a very lucrative market for IMG and their partners Mediatek, Spreadtrum, Hisilicon etc.

Soon many laptops will come with 4G/5G as standard, with batteries lasting almost double what an Intel chip can muster, with dedicated Video encoder/decoder and camera ISP hardware blocks. And potentially a PowerVR 8XT GPU at it's heart. Basically this development opens up much of the Windows market to all ARM hardware and software providers.

To begin with only Qualcomm will be providing the SoC, however I'm sure if this initiative is successful Microsoft will open the platform up to more SoC vendors. Also just to confirm I did say Win32 only, so only 32 Bit software will work, this protects the 64 Bit Windows server market for Intel, but for how long will Microsoft continue to do so?

I'm no longer a holder here, however developments like this definitely are making me think about buying back in, particularly at the current share price.
For more information check: hxxp://www.tomshardware.com/news/windows-arm-x86-native-performance,34402.html

[rob_evans] 14/5/2017 12:52

bloomer2 - I hope Apple did wonder if it would be easier to just buy IMG, and not that they wanted a closer look at IMG to ensure they would be safe from future legal claims.

Who knows?

Secondly, Apple don't just have a ex-Nvidia GPU architect, who at least from experience knows how it shouldn't be done - they also have an ex-Vivante GPU architect, and of course, several top ex-IMG people too.

It remains to be seen just how good Apple's own GPU is.

[bloomer2] 14/5/2017 10:59

Hi Rob

The questions are:-

a) Why did Apple enter into takeover talks with IMG when they were planning to be independent of IMP IP.
b) How did they build a competitive GPU? Nvidia have failed in the mobile GPU market!

[rob_evans] 13/5/2017 22:09

An excellent article in today's Times, about the warning signs to look out for with shares.

IMG have been in more than one category!

From

The signs that it is time to say goodbye to a share

Some holdings could be damaging your portfolio. We explain how to recognise the offenders

Financial organisations often spend a lot more time telling investors what they should be buying rather than what they should be selling. However, steering clear of stocks that could end up damaging your portfolio’s performance is arguably as important as buying ones that could enhance it. The danger signs are often not obvious, so you may need to enlist the help of an experienced investor.

We list ten red flags that experts tell us to watch out for.

A dominant chief executive or shareholder

Russ Mould of AJ Bell, the wealth manager, says: “There are many cases where a dominant chief executive has led a company astray. Fred Goodwin [the former boss of the Royal Bank of Scotland, or RBS] is one notable example from recent history.” The key, Mr Mould says, is to make sure the interests of management, staff and shareholders are properly aligned.

Frequent or transformational acquisitions

RBS, again, is a good example of a company ultimately laid low by its aggressively acquisitive strategy, says Mr Mould. Its overpayment for ABN Amro, the Dutch bank, proved to be the final nail in RBS’s coffin. Another acquisition stock that came to grief was Marconi (formerly GEC), the electronics company. Once among the largest companies in the FTSE 100 index, it destroyed a large amount of shareholder value through a series of acquisitions that turned out to be disastrous.

Watch out for new entrants

Guy Foster of Brewin Dolphin, the wealth manager, says: “An industry can go from being very profitable to loss-making very quickly. Tesco and other big UK supermarkets had what seemed like a comfortable and profitable set-up, until the arrival of discounters such as Aldi and Lidl. This eroded their juicy margins and meant that their expansion plans were no longer sustainable.”

An excessive focus on growth, especially earnings per share

Growth is generally regarded as a good thing, but it’s a case of growth of what. If it is growth in earnings per share, caution needs to be exercised, says Mr Mould. This is because the numbers can be easily manipulated by taking short-term measures, such as slashing research or marketing budgets. He says: “There are three areas in which growth is a real sign of long-term success: free cash flow, shareholders’ funds, and the dividend. Everything else is noise.”

Management bonuses that are triggered too easily

Bonuses and long-term incentive programmes triggered by short-term earnings should sound alarm bells. The figures can easily be manipulated and achieved by acquisitions, which grow earnings in the short term, but can destroy value and leave a company overburdened with debt in the long term. Bovis Homes, which is to pay homeowners £7 million compensation for poorly built homes, is a good example of where performance incentives led to a poor outcome for shareholders and customers

Dividend cover below two

Earnings per share should be twice the dividend per share, so that companies can pay their dividend with a nice safety margin should something go wrong. One company that had an attractive yield, but a dividend that was covered less than two times by earnings was Pearson, the publishing conglomerate. After a string of profit warnings the company was obliged to announce that it would cut its dividend for 2017.

Weak cash flow

Connaught, the property services stock, was very profitable until it collapsed in 2010. However, there was one tell-tale sign that all was not well. Revenues and profits were growing, but cash flow was not. Mr Foster says: “A warning sign for companies is a divergence of earnings and cash flow.”

Interest cover below two

When operating profits cover interest payments by two times or more it means a company has some breathing room and can afford an unexpected slip in profits and still be able to meet its interest payments. When cover falls below the two times figure it can leave a company struggling to pay its bills.

This is what happened to Imagination Technologies.

In 2015 it made operating profits of £5.6 million plus interest income of £100,000, but this covered its interest payments of £3.6 million by a modest 1.6 times.

It fell into loss in 2016 and lost half its revenues after Apple’s decision to develop its own graphic chip processors, leaving it battling to repay a substantial £18 million debt that is due in June 2018.

The cost of capital exceeds the return on capital

Shareholder value is created when a company’s return on invested capital (ROIC) is greater than its weighted cost of capital. When the reverse is true the company is in trouble. This measure of how a company is performing is ultimately more important than rises in its share price, earnings per share or even dividend. Mr Mould says: “The companies that pack Terry Smith’s Fundsmith portfolios are all stocks with high ROIC and are therefore consistently profitable and able to pay decent dividends.”

A mixture of high operational and financial gearing

Operational gearing means profits can move dramatically for a modest change in revenues. Mr Foster says: “This tends to occur in industries with high fixed costs, such as airlines, mines or oil exploration, where profits can rise sharply once you get above the break-even point — or fall sharply if the opposite occurs.”

Financial gearing means having lots of debt, which will mean high interest payments. So you can have a perfect financial storm if profits collapse at a highly operationally geared company, which then finds itself struggling to pay its interest bill.

A classic example of this is the way Glencore’s share price collapsed in 2014-15 and then recovered in 2016-17.
-End-

[rob_evans] 13/5/2017 20:24

From that article:

"Apple also hired Utku Diril back in 2013. Diril came from graphics IP maker Vivante, where he was a director of architecture. At Apple, he worked on "GPU design and architecture" from Feb. 2013 ..."

So, Apple were working on their own GPU to replace IMG's IP in early 2013. So much for the 'Apple haven't had time to design their own GPU' argument!

The big question this all raises, is what the hell IMG's senior management were doing about this for the last 4+ years!! The news seems to have come as a bombshell to them - surely they are not that incompetent?!

[jamesrowe] 13/5/2017 19:09

Agree Rob.

[rob_evans] 13/5/2017 18:00

bloomer2 > "here is also the question as to how Apple have built up their GPU expertise. Again, I assume that this has been by working with IMG staff in their offices."

Indeed, Apple poaching senoir IMG staff was discussed in depth here some months before the bombshell.

One thing I didn't see at the time, and it would have been incredibly helpful to all of us if only someone had spotted it, was this article:



Knowing in December 2015 that Apple had recruited senior GPU architects from Nvidia and Vivante would have saved a lot of people here a lot of money!

Oh well.

[bloomer2] 13/5/2017 09:13

Anyone else think it odd that within one year of holding take over talks with IMG, Apple will shortly no longer be dependent on IMG. What they would have done with the 1700 staff I have no idea, but clearly, they felt that there was some benefit of an IMG takeover!! I assume IMG management thought it was an opportunistic bid with the share price at about the £1 level and that there was better value in turning round the business. I wonder how many other opportunities they had to sell the business to Apple under HY rein when the share price was very much higher, but HY would not consider this.

There is also the question as to how Apple have built up their GPU expertise. Again, I assume that this has been by working with IMG staff in their offices. No wonder IMG are feeling so aggrieved!

[pottsey] 11/5/2017 16:24

“I think I must have missed that one - could you provide some evidence that IMG are "winning back the low and mid end market"?”
Not directly that I can link to. Sorry I understand why you want to see hard facts but the best I can do is in the Analyst call: 4th May 2017 IMG mentioned an improvement in the low and mid range.

From listening to people in the market the general censuses impression I am getting seems to be they expect IMG to make up most of the lost revenue within the next two years. Prospective new clients seem to be a lot more receptive to Furian over Rogue. This is partly seen by people like Mediatek who have moved back to PowerVR in the mid and high range.

Assuming this all pans out we end up with 2 years of cash pile from Apple, plus MIPS sale to wipe out debt + low & midrange growth to replace or partly replace Apple and we end up with IMG back in an safe position again even if they fail to make a deal with Apple. IMG have clearly lost there chance of becoming a FTSE 100 company but as long as they don't mess things up even more they should be ok going forward.

[rbalakrishnan] 11/5/2017 14:52

Following on from the refocusing that is going on at Mediatek it looks like PowerVR will be making a comeback in the mid range (fingers crossed) in Mediatek's soon to be launched new processor the Helio P23. One of the main features of the X30, the PowerVR 7XTP, is rumoured to be transplanted into the P23 making it more affordable than the X30. The chip will support LTE CAT 7 which was the reason why Mediatek lost ground in the mid-range to the Snapdragon last year. This chip will take on the Snapdragon 660 and Snapdragon 630. Devices with the chip are expected to appear by the end of the year.

[rob_evans] 11/5/2017 10:48

Pottsey > "A lot of people seemed to have missed IMG should still be getting money from Apple for many years to come. It’s not expected to suddenly drop to zero after 2 years, it’s going reduce a lot but not go to zero that could take 4+ years"

Agreed!


Pottsey > "It looks like IMG are winning back the low and mid end market which should put them back in profit without Apple"

I think I must have missed that one - could you provide some evidence that IMG are "winning back the low and mid end market"?