backtop


Print 12 comment(s) - last by BifurcatedBoat.. on Nov 8 at 1:43 PM

As ARM Holdings pumps up its GPU product, Imagination Tech. strikes back with bold move

Imagination Technologies Group plc (LON:IMG) has long waited on the sidelines of the smartphone industry, playing a pivotal role as wingman to the likes of Intel Corp. (INTCand domestic peer ARM Holdings plc (LON:ARM).  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 announced 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.

PowerVR GPU
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.

Comments David Harold, Imagination Technologies spokesman, to the BBC, "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 [dev info], there are only a handful of products (an e-reader or two) that use the alternative reduced instruction set computer (RISC) architecture.

Android MIPS
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 (LON:INVP), 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
ARM has made a killing off smartphone CPUs. [Image Source: ARM/Facebook]

Secondly, ARM Holdings struck first, stepping up its GPU efforts with its Mali 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. (GOOG) and Samsung Electronics Comp., Ltd. (KSC:066570).  

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.

Sources: MIPS Technologies, Imagination Technologies, BBC News



Comments     Threshold


This article is over a month old, voting and posting comments is disabled

RE: Competetion is good
By someguy123 on 11/8/2012 1:11:22 AM , Rating: 2
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.


"Let's face it, we're not changing the world. We're building a product that helps people buy more crap - and watch porn." -- Seagate CEO Bill Watkins

Did You Partake in "Black Friday/Thursday"?
Did You Partake in "Black Friday/Thursday"? 





0 Comments












botimage
Copyright 2014 DailyTech LLC. - RSS Feed | Advertise | About Us | Ethics | FAQ | Terms, Conditions & Privacy Information | Kristopher Kubicki