Imagination Technologies CEO steps down amid financial upheaval

Imagination Technologies CEO Hossein Yassaie announced his departure this morning as the company warned it would record a loss for its fiscal year ending April 30, 2016. Yassaie joined the company in 1992 and became its CEO in 1998. His corporate profile credits him with creating the intellectual property licensing model that brought the company to prominence.

Imagination says royalties from some of its key customers fell short of its expectations last quarter, and it now expects less revenue in the first quarter than it had previously forecast, as well. In response, the company expects to cut $26.2 million (£15 million) from the operating costs of some of its businesses between now and April 2017. It plans to re-invest $2.9 million (£2 million) of that savings back into its PowerVR graphics division. The company will also sell off its Pure consumer electronics business.

The company appointed Andrew Heath as its interim chief executive officer, and it says it'll begin the search for a new CEO immediately. Heath had previously served in executive positions at Rolls-Royce and as CEO of Alent. Imagination's PowerVR graphics processors can be found in Apple's iPhone and iPad, among many other products.

Comments closed
    • raddude9
    • 4 years ago

    You’ve got to wonder, was getting into the MIPS business their undoing. I’ve seen it many times before (and experienced it in my own career more than once), a company has a tidy profitable business and then they try to expand by getting into a new business, the company’s focus suffers as people working on profitable projects get dragged onto pie-in-the-sky projects that have no discernible revenue-stream. Pretty soon the profitable part of the business starts to go into decline with no replacement revenue stream in the new part of the business.

    • ronch
    • 4 years ago

    Kinda hard to believe Imagination is having trouble given how they’re one of the most respected GPU IP houses in the world of mobile. I’m typing this on a low end tablet (because I’m more comfortable tossing it around than my thin S2) with graphics from Vivante. [b<]Vivante[/b<]. You guys even heard of them? Probably not. But for an unknown company, it's amazing how their graphics have never given me any problems. Sure it's slower than a sick snail but it displays pixels correctly. Certainly a far cry from early attempts at 3D by folks from Alliance, S3, Cirrus, etc. Yes I know you can't compare them but these guys know how to do it correctly.

      • adisor19
      • 4 years ago

      Trident. Trident needs to make a comeback.

      Adi

        • ronch
        • 4 years ago

        After they got humiliated with the XP4? I remember their guy Nguyen talking trash in those days. I wonder what he’s doing now.

          • adisor19
          • 4 years ago

          Still, part of me wishes my comment was less of a joke and more wishful thinking…

          It just seems that these days nobody wants to pay for high performance anything and so far only Apple has enough cash to throw at a problem in order to solve it. It’s obvious Apple won’t let imagination go down as they have way too much riding on them but it’s also possible they are starting to look at creating their own GPU ip as a backup. But how long can this last ? iPhone sales will probably reach a peak this year and iPad sale are struggling big time. Apple won’t throw that much cash at it if they can’t justify making a profit in the future.

          AMD is struggling and they are only floating because of their console contracts. Nvidia are in deep trouble IMO. Their SoC division is more or less dead and they have nothing else to sustain them.

          The gaming PC market is too small to make a difference for any of them and neither have any involvement in the SoC market which was supposed to be holy grail just a few years ago.

          Even Samsung is slowly backing away from flagship devices and focusing more on everything else below.

          It’s really not looking good out there for anybody.

          Adi

            • ronch
            • 4 years ago

            The world realizes tech isn’t the answer to everything, I guess.

    • ronch
    • 4 years ago

    And so the great SoC IP shakeout has begun.

    • Unknown-Error
    • 4 years ago

    Disappointing they have not achieved any success with MIPS.

    • Srsly_Bro
    • 4 years ago

    ah….no one is going to say he lacked imagination? no one…..

      • Concupiscence
      • 4 years ago

      Well, he certainly is [i<]now.[/i<]

    • HisDivineOrder
    • 4 years ago

    Intel must be chomping at the bit to buy them out.

      • chuckula
      • 4 years ago

      Quite the opposite. Intel used to own a larger share of Imagination and intentionally sold off its interest: [url<]http://www.theguardian.com/business/marketforceslive/2015/feb/13/imagination-technologies-slips-as-intel-sells-remaining-stake[/url<]

        • the
        • 4 years ago

        Whoa, I thought Intel still held a small share since they’re still using PowerVR in the Atom X3 line up. I guess I stand corrected.

          • chuckula
          • 4 years ago

          I’m sure Intel is still a customer and IP licensee to some degree, but they apparently didn’t want to be part-owner of the company that now owns MIPs.

          It makes sense since the regulators would probably drop a hammer on Intel if it looked like Intel’s part-ownership of Imagination appeared to produce some sort of negative impact on MIPs products.

      • Flatland_Spider
      • 4 years ago

      I can’t think of anyone besides Apple who would be interested in picking them up since they would have the most to lose.

      Regardless, it’s probably the end of MIPS unless the US government lets the Chinese buy them, which is too bad.

      Broadcom maybe?

    • tviceman
    • 4 years ago

    This is when Apple swoops in and just buys them outright. I don’t know why they haven’t done so already.

      • the
      • 4 years ago

      Apple is the 800 lbs. gorilla of the tech industry now. Any major acquisition like this would be subject to heavy regulatory scrutiny. Several other players would heavily object like Qualcomm and Samsung in an attempt to block the acquisition.

      Having said that, Apple does own a significant portion of Imagination [s<]shares as does Intel[/s<]. A hostile take over at this juncture (assuming regulatory approval) would give a nice cash injection to one of their competitors in mobile. Strategically though, it would be an overall good move for Apple to make but I don't see them doing it considering the challenges I've outlined above. Edit: Apparently Intel [url=http://www.theguardian.com/business/marketforceslive/2015/feb/13/imagination-technologies-slips-as-intel-sells-remaining-stake<]sold of their Imagination shares[/url<]. Link thanks to chuckula.

        • chuckula
        • 4 years ago

        There’s talk that Apple is actually developing its own GPU architecture.

        I doubt that making your own architecture is more efficient than just buying Imagination, but Apple has the money to do it and tends to like control.

          • the
          • 4 years ago

          True and Apple’s GPU team at the very least has lead Apple to implement ‘custom’ PowerVR implementations.

          One thing Imagination does have is an excellent patent portfolio relating to several key graphics technologies (tile based rendering for example). Just buying them for the patents could pay off as a defensive legal move.

            • VincentHanna
            • 4 years ago

            [quote<]Just buying them for the patents could pay off as a [b<][u<][i<]defensive[/b<][/u<][/i<] legal move.[/quote<] Lol. Yeah.

        • blastdoor
        • 4 years ago

        [quote<]Apple is the 800 lbs. gorilla of the tech industry now. Any major acquisition like this would be subject to heavy regulatory scrutiny.[/quote<] Apple is extremely profitable, but they have less than a 50% marketshare for their biggest, most profitable products. iPhone is less than 20% worldwide; iPad is about 25%; mac is between 5 and 10%. How does that warrant regulatory scrutiny?

          • chuckula
          • 4 years ago

          In the PC world Apple is an also-ran, but in the phone world marketshare numbers are meaningless. Apple has huge control over the PROFIT-share in the market. And believe me, I’ve heard that line repeated over & over by the Faithful, so you can’t ignore the same fact when it comes to market domination.

          Furthermore, Apple has an undue amount of influence over applications and content with its walled-garden ecosystem. That’s another red flag for regulation: When being strong in one market lets you manipulate another market.

            • VincentHanna
            • 4 years ago

            [quote<]Apple has huge control over the PROFIT-share in the market. And believe me, I've heard that line repeated over & over by the Faithful, so you can't ignore the same fact when it comes to market domination.[/quote<] This is a meaningless statement. One can acknowledge the fact that apple earns higher margins on their products and takes more net profit per device without concluding that they are a monopoly. Quite the opposite really, as apple famously eschews large segments of the population who can't afford their products. Basically you are attempting to conflate the meaning of the word monopoly, with another pseudo-definition because the classical definition, the one that regulators will actually use, doesn't appeal to you philosophically. [quote<]Furthermore, Apple has an undue amount of influence over applications and content with its walled-garden ecosystem. That's another red flag for regulation: When being strong in one market lets you manipulate another market.[/quote<] Apple prevents products that compete with their own products from being placed in the apple store. Apple also blacklists certain apps that it doesn't like for seemingly arbitrary reasons. Apple ALSO takes 30% of every sale (including in-app purchases, which in the case of content re-distribution like e-books and movies, does have a noteworthy chilling effect on those markets)... However apple owns the store. Apple is allowed to do those things, monopoly or not. I would LOVE for some prosecutor to take a swing at the walled garden, but I doubt they will. They have tried and failed at it before with iTunes, when iTunes was actually a monopoly, and actually causing real chaos in a number of other industries. Besides, what does that have to do with purchasing imagination? Your argument reads: because apple is a monopoly controlling apps that appear on their own devices (which you have defined arbitrarily to constitute an entire industry in it's own right), Apple should be prevented by regulators from buying a company that doesn't make any phone or tablet applications whatsoever. Non-sequitor.

            • blastdoor
            • 4 years ago

            [quote<]Apple has huge control over the PROFIT-share in the market. And believe me, I've heard that line repeated over & over by the Faithful, so you can't ignore the same fact when it comes to market domination.[/quote<] Anti-trust regulators aren't interested in what people say in Internet flame wars. They are interested in marketshare. Apple simply doesn't have enough marketshare to warrant attention from anti-trust authorities. If you want to argue that anti-trust regulators should focus on Apple, then you have to make an argument about how we define the market. You have to argue that the iPhone is so different from other smartphones that it is actually an entirely different class of product. That's a very different thing from saying that it's a better product. It's like saying the iPhone is a car and Android phones are horse-drawn carriages. As for the walled garden thing --- that is also irrelevant so long as the iPhone is defined as a smartphone.

            • 223 Fan
            • 4 years ago

            The greater good.

          • BobbinThreadbare
          • 4 years ago

          Worldwide marketshare is irrelevant, unless there are world wide regulatory bodies I’m unaware of.

          • the
          • 4 years ago

          Mainly from the removal of an IP seller from the open market. It is less about the market share of Apple but rather the market share of PowerVR. I would not expect Apple to sell any new PowerVR GPU blocks to companies, especially those whose end products are direct competitors to Apple.

          To use an analogy, if Apple were to buy Intel, don’t you think the likes of HP, Dell and Lenovo would all object due to what it would do to their supply chain of a key component? Despite Macs only being 5% of the global market, such a hypothetical move would have a huge negative impact throughout the entire PC industry. Regulators analyse such things and accept feedback from the other player’s in the market.

        • VincentHanna
        • 4 years ago

        [quote<]Apple is the 800 lbs. gorilla of the tech industry now. Any major acquisition like this would be subject to heavy regulatory scrutiny... [/quote<] 1) They only make and sell hardware, and even as a hardware manufacturer, they are relatively small potatoes. They are envied by everyone because of the massive margins they are able to command on everything they sell, but they are near the bottom of the list in terms of market-share. 2) Imagination is primarily interesting for their silicon tech (though apple would probably make great use of PowerVR and whatever else imagination has). Apple, while designing custom cores not licensed externally, is not really in a position to be accused of anti-trust unless they do something incredibly stupid like colluding with Samsung, intel, AMD, ARM and Nvidia to not sell silicon processors to amazon (except at apple approved price-points) because they want to sell e-readers and they don't like competition. Barring that chain of events, I don't see anything that the regulators could do to prevent apple from buying imagination if they wanted.

          • blastdoor
          • 4 years ago

          Thinking about this some more….

          The only anti-trust argument that I can think of against Apple buying Imagination would be if that purchase would leave the GPU market with a monopolist. In other words, the argument has to be less about Apple and more about the state of the GPU market.

          For example, I could see regulators being upset about Apple buying AMD if Apple planned to shut down AMDs x86 business. That has nothing to do with Apple and everything to do with Intel.

            • Flatland_Spider
            • 4 years ago

            Exactly.

            Let’s see who would be left to license mobile graphics from:
            * AMD (so they say anyway.)
            * Qualcomm
            * ARM
            * Broadcom
            * Vivante

            • VincentHanna
            • 4 years ago

            * Nvidia
            * Texas Instruments
            * IBM
            * Samsung
            * Apple o.0

            • Flatland_Spider
            • 4 years ago

            [quote<] * Nvidia [/quote<] I didn't think Nvidia was interested in licensing graphics IP. I thought they just wanted to sell chips. [quote<]* Texas Instruments[/quote<] I didn't think they were a player in mobile anymore, or had any sort of graphics technology. [quote<]* IBM[/quote<] Really? Who did they acquire to get that, and will it make it's way into the OpenPower specs? [quote<]* Samsung[/quote<] Are they making movements towards in house graphics? Normally, their chips use PowerVR or Mali graphics. [quote<]* Apple o.0[/quote<] 🙂 They may have some government contracts that need to be fulfilled like when they acquired PA Semi, but aside from that, I don't expect to see any IP leave the blackhole that resides in Cupertino.

            • Deanjo
            • 4 years ago

            [quote<]I didn't think Nvidia was interested in licensing graphics IP. I thought they just wanted to sell chips.[/quote<] [url<]http://www.anandtech.com/show/7083/nvidia-to-license-kepler-and-future-gpu-ip-to-3rd-parties[/url<]

            • Flatland_Spider
            • 4 years ago

            I stand corrected.

            • JMccovery
            • 4 years ago

            Has anything actually materialized from this? Not exactly sure how many companies (if any) have put out products using Nvidia IP, other than what IP is/was involved in lawsuits versus Qualcomm and Samsung.

            • BobbinThreadbare
            • 4 years ago

            No one can buy AMD, their x86 licenses from Intel are non-transferable.

      • tipoo
      • 4 years ago

      Apple was already a major stakeholder, one of the biggest customers, and already had a huge say in development directions and semi-custom parts. I think that’s pretty much the answer to “why hasn’t Apple bought them”, they’re already getting the milk for free.

      • ImSpartacus
      • 4 years ago

      I thought imagination is partially owned by several different companies (Apple, Intel, etc) as a means to prevent any one company from buying Imagination.

    • chuckula
    • 4 years ago

    It’s too bad to hear since Power VR is a very interesting mobile GPU.

    Some people say that being an IP-only organization is easier than manufacturing products, but a small company like Imagination is also quite vulnerable to the whims and fluctuations in sales of products from its largest customers (e.g. Apple).

      • the
      • 4 years ago

      The problem with being an IP only organization is that you have to compete against other IP only organizations as well competitors who offer the whole stack. In the last couple of years we have seen rumors of every player developing their own GPU: Apple, Hauwei, and Samsung for example. To top things off, ARM will sell you a Mali core alongside a Cortex core, Qualcomm has their own GPU division and nVidia is now licensing out their GPU cores as an IP block. Things are starting to look over saturated from a 10,000 ft view. The good news for Imagination is that many of these competitors are small, nonexistent in the market or just pure rumors. Regardless, there is leverage for SoC designer to negotiate.

      • guardianl
      • 4 years ago

      The days of Power VR GPUs being wildly different are slowly waning – not to suggest they don’t have an excellent GPU designs still. However, they have moved closer to the conventional unified shader SIMD model of practically all GPU makers now with series-6. It’s primarily just a necessity to support the OpenGL ES 3.x feature set.

      Yes, they still have tile-based rendering, but I suspect they’ll eventually give it up. Tiled-based rendering primarily saves bandwidth at the cost of on-die and driver complexity. Mobile SoCs now have more memory bandwidth then desktop CPUs (sometimes more than discrete GPUs – A9X @ 51.2GB/s is crazy!) but logic node shrinks are slowing. So the performance bottlenecks today are different than five years ago.

      Environmental factors often force convergent evolution. GPU designs are probably in the midst of such a process.

        • the
        • 4 years ago

        The reason why PowerVR took off with their tile based rendering in mobile wasn’t due to performance (which was good for the time) but rather the low power consumption it had. Performance-per-watt of the PowerVR architecture has always been exceptional. Combine that with a licensing model mimicking ARM, and Imagination had a model for success.

        Now I just don’t know how well PowerVR holds up in terms of performance per watt compared to the newer architectures from ARM, Qualcomm and nVidia. With the removal of the memory bottleneck in some cases, the efficiency of these architectures should jump. With WideIO on the horizon, the dynamics here could change once again.

    • Platedslicer
    • 4 years ago

    I expect this to become a trend in the near future. Things around the world aren’t looking rosy. Like 2008, there are lots of bad bets that are beginning to stink too much to stay under the carpet for much longer.

      • NovusBogus
      • 4 years ago

      No doubt about it, the Western world has just about run out of free money to squander on grand monuments to hubris. The fall is coming, and it will be cataclysmic.

        • chuckula
        • 4 years ago

        [quote<]the Western world has just about run out of free money to squander on grand monuments to hubris.[/quote<] You misspelled China there. [url<]http://gizmodo.com/chinas-enormous-derelict-shopping-mall-does-not-bode-we-1753562570[/url<] [url<]http://www.chron.com/news/nation-world/world/article/An-eerie-look-inside-China-s-ghost-cities-6810665.php[/url<]

          • DrCR
          • 4 years ago

          I’m much of your mind, but as for the “Pentagonal Mart” in Shanghai, adjust the zoning and redo some of the space for small apartments, and issue fixed.

            • BobbinThreadbare
            • 4 years ago

            That might fix one “issue”, but not what China is going to with all the stuff they built [url<]http://www.forbes.com/sites/kenrapoza/2015/07/20/what-will-become-of-chinas-ghost-cities/#2582479c751b[/url<] Edit: I notice now chuckula linked a ghost city story.

          • NovusBogus
          • 4 years ago

          China is certainly in trouble too, but their development is fueled entirely by exports so they’re the follower not the leader here. The sin falls on the one that wanted to have his cake and eat it too, not the one who made a fast buck providing the cake.

          • raddude9
          • 4 years ago

          I don’t think Westerners understand the full implications of Chinese property law and how the “ghost cites” problem is not as bad as it seems at first.
          It comes down to ownership, in mainland China you don’t own urban land outright (I’m simplifying massively here), you just buy the right to use it for a certain time from the government (70 years in the case of residential land). This means that with some very notable exceptions (Shanghai and the other tier-1 Chinese cities) urban land re-development simply does not occur, if you only have 20 years left of your land grant, are you going to spend money to improve the building… no you’re not because in 20 years it’s not going to be yours any more.
          So, instead of the western model, where city-centers get redeveloped, in China, they move, from the old center (where all the development happened a decade ago) to the new one where the development is still happening.
          So, while some of these ghost developments will have to be written off, most will eventually be used.

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