Imag­i­na­tion lack­ing af­ter Ap­ple’s move

The Daily Telegraph - Business - - Business - TOM REES MAR­KET RE­PORT The Scots­man

CON­CERNS that Imag­i­na­tion Tech­nolo­gies’ Ap­ple earn­ings will dis­ap­pear ear­lier than ex­pected sent the takeover tar­get slid­ing as the new iPhone’s de­layed re­lease sunk sup­pli­ers across the globe.

While some of Imag­i­na­tion’s in­tel­lec­tual prop­erty re­mains in the new iPhone X, Ap­ple has stated it has de­signed the graph­ics pro­cess­ing unit (GPU) in the new prod­uct, hint­ing that the com­pany will be­gin to phase-out its re­la­tion­ship with the Hert­ford­shire­based com­pany, which had de­rived around half of its rev­enues from the Sil­i­con Val­ley gi­ant.

Nearly £470m was wiped off Imag­i­na­tion’s val­u­a­tion overnight in April af­ter Ap­ple re­vealed that it was ditch­ing the com­pany and mak­ing its own GPU from 2018. Dec­i­mated by the share price plum­met, the com­pany then put it­self up for sale with Beijing-backed pri­vate eq­uity fund Canyon Bridge Cap­i­tal Part­ners ru­moured to be in the run­ning.

It ap­pears, how­ever, that the world’s largest listed com­pany has fast­for­warded its plans to take full con­trol of its prod­ucts’ GPU, weak­en­ing Imag­i­na­tion 7.3p, or 5.1pc, to 135.8p. If con­firmed, it would mean less per de­vice Ap­ple roy­alty pay­ments a year ear­lier than ex­pected, said Stifel an­a­lyst Lee Simp­son.

The iPhone X’s de­layed Novem­ber re­lease date took the shine off the tech gi­ant’s lat­est un­veil­ing with unim­pressed in­vestors dump­ing shares in sup­pli­ers re­liant on a strong Ap­ple sales boost in the fourth quar­ter of the year.

Tiny Welsh chip maker IQE, whose share price has tripled since spec­u­la­tion mounted that the com­pany would be in­te­gral to the new iPhone’s 3D-track­ing tech­nol­ogy, was one of Ap­ple’s vic­tims, re­treat­ing 10.3p to 136.8p.

Over in the US, Ap­ple con­tin­ued to fall, shed­ding an­other 1pc af­ter the open­ing bell in New York as traders at­tempted to de­ci­pher the im­pact of the tech firm’s de­layed re­lease on earn­ings. Else­where, in­dus­trial metal pro­duc­ers tor­pe­doed the FTSE 100 as cop­per slipped to pull down min­ers Glen­core and Rio Tinto 8.9p to 363.6p and 66p to £36.25, re­spec­tively.

How­ever, BP and Royal Dutch Shell ‘B’ climb­ing 3.5p to 452.4p and 14p to £21.92, re­spec­tively, on the price of oil ral­ly­ing mit­i­gated the blue-chip in­dex’s 20.99-point fall to 7379.70. Brent crude prices ad­vanced 1pc to just un­der $55 per bar­rel af­ter the In­ter­na­tional En­ergy Agency fore­cast higher de­mand in 2017 as Opec’s pro­duc­tion be­gins to ebb, en­cour­ag­ing traders that the oil mar­ket is fi­nally be­gin­ning to re­bal­ance.

Fi­nally, news­pa­per pub­lisher John­ston Press firmed 0.13p to 12.8p af­ter pri­vate eq­uity firm Cus­tos upped its stake in the and pub­lisher from 5pc to just over 8pc.

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