Imagination Technologies, the company that’s long supplied graphics chip designs for the iPhone, has announced plans to sell off two of its businesses amid a major patent dispute with Apple.
Last month, Imagination’s business was crushed after Apple announced it would begin making its own graphics solutions and end its reliance on the company within two years. Its stock price dipped by more than half within a single day and has only lowered since.
To stabilize itself, Imagination is doing two things: first, it’s announcing plans to sell off two businesses — one focused on embedded processors, another on licensing patents related to mobile and IoT. And second, Imagination is beginning a formal “dispute resolution procedure” with Apple, in hopes of getting Apple to license some of its graphics patents.
Imagination believes that Apple can’t possibly build its own graphics chips without infringing on some of its patents. But Apple has contended otherwise, so Imagination is now turning to a dispute process set up under the two companies’ existing licensing agreement.
“Apple has not presented any evidence to substantiate its assertion that it will no longer require Imagination’s technology, without violating Imagination’s patents, intellectual property, and confidential information,” the company wrote last month.
Imagination now says that it has “been unable to make satisfactory progress” on a new licensing arrangement, which is why it’s decided to turn to the formal dispute process. Apple did not immediately respond to a request for comment.
The outcome of this dispute is pretty critical for Imagination. The company’s business essential revolves around the iPhone, which brings in huge royalty payments. The “PowerVR” unit that Apple licensed graphics technology from was responsible for more than 60 percent of Imagination’s revenue in its last fully reported year. So it’s clear why Imagination is aggressively pursing a way to keep any amount of Apple’s payments coming.