Apple Raids Imagination Technologies Staff To Develop iPhone GPUs

Apple iPhone

Apparently Apple was not bluffing last week when it told longtime partner Imagination Technologies that it was parting ways and planning to build its own graphics processors for use in iPhone and iPad devices. While that could have been a negotiating tactic (and still might be), Apple has posted job listings looking for help in developing home grown GPUs for mobile products.

Imagination Technologies has been licensing its graphics technology to Apple for many years, dating back to the iPod era. Its graphics IP is found in several of Apple's products, including its iPhone, iPad, iPod, and even Apple Watch devices. This has been a lucrative arrangement for Imagination Technologies—Apple is by far its biggest customer, accounting for around half of the company's revenue.

News of Apple pulling out of the partnership hit Imagination Technologies hard. The company's stock tumbled more than 70 percent following the announcement, but it gets worse. With Apple looking to hire engineers and other talent to help develop its own GPU technology, employees at Imagination Technologies could decide to jump ship.

That would not be unprecedented—not only is poaching employees a common thing in the technology sector, a view of LinkedIn profiles shows that more than two dozen former Imagination Technologies workers have joined Apple in the past two years. One of them is John Metcalfe, the former chief operating officer for Imagination Technologies.

Whatever Apple does moving forward, Imagination Technologies will be keeping a close watch. The company is skeptical that Apple will be able to build a GPU of its own without infringing on its IP.

"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. This evidence has been requested by Imagination but Apple has declined to provide it," Imagination Technologies said.

"Further, Imagination believes that it would be extremely challenging to design a brand new GPU architecture from basics without infringing its intellectual property rights, accordingly Imagination does not accept Apple’s assertions," the company added.

The alternative to Apple building its own GPU is for Imagination Technologies to present the company with a new deal, one with better terms that would convince Apple to continue using its IP. The two sides are in talks about revising the current license agreement, with Imagination Technologies promising another announcement sometime in the future.