Imagination lacking after Apple’s move
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.