Imagination Tech. Acquires MIPS, Aims to Battle ARM in Mobile Market
November 7, 2012 1:02 PM
comment(s) - last by
As ARM Holdings pumps up its GPU product, Imagination Tech. strikes back with bold move
Imagination Technologies Group plc (
) has long waited on the sidelines of the smartphone industry, playing a pivotal role as wingman to
the likes of Intel
and domestic peer ARM Holdings
). But after years of success
making GPU cores
to accompany various mobile/lightweight CPUs, Imagination Technologies is eyeing a shift into the leading role.
I. GPU Giant Goes CPU
The company on Tuesday
that it would be acquiring U.S. chipmaker MIPS Technologies Inc.'s (MIPS) business operations unit, plus part of its patent portfolio for $60M USD (£37.6M).
The patent pickup isn't of particular concern to ARM Holdings, which just signed a cross-licensing deal with MIPS. Under the
relatively complex plan
, the soon-to-be-acquired MIPS unit will retain 82 core patents on its architecture, but will
sell its remaining 498 more ubiquitous patents
to "Bridge Crossing", an ARM Holdings subsidiary, for $350M USD. The MIPS unit will retain permanent royalty-free licensing rights to these patents, so it doesn't have to worry about getting sued with its former IP anytime in the future.
Imagination Tech. makes the PowerVR GPUs found inside the iPad and other products.
[Image Source: IBTimes]
The concern part of the detail for ARM Holdings is the pickup of the chipmaking unit. Imagination Technologies has expressed the desire to be an "industry-leading force" in the mobile CPU market, challenging its current partner ARM Holdings.
David Harold, Imagination Technologies spokesman, to the
, "We think that it strengthens our line-up and offers more choice. ARM are obviously very strong in the CPU space and we have been niche. But by bringing MIPS into our business we think it will become a strong alternative in the CPU market."
II. A Tough Road Ahead
ARM Holdings main advantage -- and the key challenge facing Imagination Technologies -- is the lack of MIPS products in the mobile market. While Android (Linux-based) tablets
can run on MIPS processors
], there are only a handful of products (an e-reader or two) that use the alternative reduced instruction set computer (RISC) architecture.
A few Android tablets run MIPS, but not many.
MIPS chips do have substantial market share in networking applications, and a growing stake in the
digital television business
. But translating those successes into a legitimate challenge of the RISC king of mobility, ARM Holdings, will be challenging, to say the least.
James Goodman, an analyst with Investec plc (
), a London-based banking an asset management group, asserts, "MIPS has good standing, we understand, in areas such as networking and digital TVs. Imagination expects to broaden the strategy towards the mobile segment, whilst at the same time we are seeing ARM aggressively target the networking and DTV segments."
"We therefore believe the competitive pressure has increased significantly, whilst the risk to the strategy is also considerably greater. The cash cost is $60m and we assume there will be further exceptional costs in combining the businesses."
III. Move Has a Survivalist Aspect to it
So why would Imagination adopt such a risky ploy?
First, there is great reward if it pays off -- even with a small stake of the exploding mobile market. ARM Holdings has been
posting wildfire profits
and booming growth; Imagination Technologies is likely surely salivating at the prospect of similar performance if its new effort sees success.
ARM has made a killing off smartphone CPUs. [Image Source: ARM/Facebook]
Secondly, ARM Holdings struck first,
stepping up its GPU efforts
product line. While Imagination Technologies' PowerVR GPU cores are still heavily used by certain OEMs (such as Intel), ARM Holdings has scored some key design wins, such as the
Nexus 10 tablet
from Google Inc. (
) and Samsung Electronics Comp., Ltd. (
Imagination Technologies likely weighed the risk of marginalization in the GPU market carefully against the risk of entering a new and hostile market (CPUs). Analysts may not predict Imagination Technologies to see success in this new market, but most analysts do agree that there are design advantages to getting your CPU and GPU intellectual property cores from a single source. Thus if Imagination Technologies didn't act it may have been slotted for a slow demise; as is, it has positioned itself in the role of the feisty underdog.
, Imagination Technologies,
This article is over a month old, voting and posting comments is disabled
RE: Competetion is good
11/7/2012 8:22:38 PM
I'd say x86 has a leg up in this regard due to the amount of time and money Intel has poured into making Android fully compatible.
RE: Competetion is good
tat tvam asi
tat tvam asi
11/7/2012 11:06:11 PM
Why didn't Intel think of buying MIPS? They had better chances of taking in ARM in the mobile space with MIPS than with x86 -- my opinion anyway.
RE: Competetion is good
11/8/2012 1:11:22 AM
Because they're gradually reducing the performance/power cost of x86 with each node shrink. They can't compete yet but they're getting pretty close.
"This is from the DailyTech.com. It's a science website." -- Rush Limbaugh
Report: Apple Looks to Ditch Intel Chips in Macs for ARM
November 6, 2012, 12:33 PM
Google Talks Nexus Strategy Amid Nexus 4, Nexus 10 Launch
November 5, 2012, 10:43 AM
ARM Celebrates Another Winning Quarter, Pockets $108M USD Pre-Taxes
October 23, 2012, 4:42 PM
MIPS Looks to Challenge ARM in Mobile Device Dominance
May 16, 2012, 4:01 PM
Report: Apple's A5X Beats Tegra 3 in Graphics, But Not in Pure CPU Performance
March 19, 2012, 12:10 PM
Moto 360 to go "Champagne Gold" for $299, According to Amazon Listing
October 30, 2014, 3:24 PM
Call-capable Samsung Gear S Smartwatch Launches Nov 7 in U.S.
October 30, 2014, 12:45 PM
Lenovo Completes $2.91B Acquisition of Motorola
October 30, 2014, 11:57 AM
Samsung Electronics Q3 Profit Falls by 60%, Mobile Division Sees 74% Profit Decline
October 30, 2014, 10:10 AM
Microsoft's $199 Fitness Band Packs in 10 Sensors, Works with Windows Phone, iOS, and Android
October 30, 2014, 8:58 AM
Google’s Project Ara Modular "LEGO" Smartphone Shown Booting Up on Video
October 29, 2014, 5:28 PM
Most Popular Articles
Amid Theater Boycott Netflix Defiantly Plans New Movies, Plus 3 TV Shows for 2015
October 24, 2014, 7:30 PM
AT&T Defeats Purpose of New Apple SIM, Locks iPad Air 2 SIMs to Its Network
October 24, 2014, 2:17 PM
CVS, Rite Aid Kill Unofficial Apple Pay Support, Burn Google Wallet Users in the Process
October 25, 2014, 5:26 PM
1 Million Credit Card Activated on Apple Pay Within 72 Hours, Walmart CEO Hopes Visa "Suffers"
October 28, 2014, 8:17 AM
Microsoft's Figures Show Desktop Users Flocking to Windows 10 Preview
October 27, 2014, 11:04 AM
Latest Blog Posts
Costco Gives Employees Thanksgiving Off; Wal-Mart Leads "Black Thursday" Charge
Oct 29, 2014, 9:57 PM
"Bear Selfies" Fad Could Turn Deadly, Warn Nevada Wildlife Officials
Oct 28, 2014, 12:00 PM
The Surface Mini That Was Never Released Gets "Hands On" Treatment
Sep 26, 2014, 8:22 AM
ISIS Imposes Ban on Teaching Evolution in Iraq
Sep 17, 2014, 5:22 PM
Space Terrorism is a Looming Threat For the United States
Apr 23, 2014, 7:47 PM
More Blog Posts
Copyright 2014 DailyTech LLC. -
Terms, Conditions & Privacy Information