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Imagination Technologies takes Apple back again

Imagination Technologies takes Apple back again

No tool buries a hatchet more efficiently than the promise of revenue.

This month, a United Kingdom designer of highly specialized chips and software announced that it had updated a 2014 license contract with Apple Inc., to get access to unspecified designs, possibly including plans for a seemingly arcane computing function called ray tracing.

Ordinary enough, but the intellectual-property merchant, Imagination Technologies, still has Apple’s tread marks all over its back. Imagination makes money by selling licenses to its designs for graphics, compute, machine-vision, artificial-intelligence and connectivity hardware and software.

That is what happened when it signed the 2014 agreement with Apple — with whom Imagination first started working in 2007 –for the right to use Imagination graphics-chip designs in Apple’s system-on-chip graphics chip. According to reports, Apple liked what it was getting well enough to consider buying Imagination outright.

Then, in 2017, after filling Imagination’s coffers for three years, Apple stopped licensing the designs, bringing the work in house instead. Again, not that extraordinary, except for the fact that according to The Sunday Times, Apple’s licensing deal for the graphics chip amounted to half of Imagination’s sales.

Imagination shares plunged as much as 71 percent on the news. The company lost its chief operations officer, John Metcalfe, who set up Apple’s competing design center just miles from Imagination headquarters. Imagination sold some of its non-graphics design operations.

Ultimately, in 2017, executives agreed to sell the firm at a loss compared to previous valuations to Chinese equity fund Canyon Bridge (part of Yitai Capital) in a deal valued at the time at $742 million. At one time, the firm, kickstarted in 1985, was listed and valued at $2.5 billion.

Not surprisingly, neither Apple nor Imagination has talked about what enticed the pair together again, but Imagination is raising eyebrows with its designs for systems capable of efficiently handling the computations behind tracing the rays of simulated light, or ray tracing.

Getting lighting right is difficult, and especially so when designers want something to look realistic in three dimensions. Light scatters, reflects and gets absorbed according to complicate real-world physics. Get it wrong, and it is readily apparent.

So, ray tracing is critical to virtual- and augmented-reality applications, including those used for games. Retailers are another prime market. Realistic simulations and demonstrations could prompt new sales.

Imagination chief executive Ron Black, talking with The Sunday Times at the entertainment and technology product show CES this month coyly said that his firm’s ray-tracing designs have him feeling optimistic.

For its part, Apple is rumored to be investing heavily in virtual- and augmented-reality products. That market is expected to reach $19 billion this year and grow rapidly.

Apple might also be interested in some of the technology designs that Imagination touted at CES.

Being one of the many companies worldwide interested in expanding into semi-autonomous and autonomous vehicles, Apple might covet a production-quality surround-view app for cars. The software knits together the feeds from four cameras around a car, and merges them into a single perspective-correct image a PowerVR Series6 GPU, running on a Renesas R-Car H3 platform.

Another CES demonstration likely of interest to Apple involved FaceID, software that uses FaceNet, a deep learning neural network model that recognizes faces quickly. The product, known as FaceID, uses Imagination’s newest neural network accelerator designs.

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