SAN FRANCISCO--Exponential mobile computing growth and major upgrades to graphics chips are aligning to give Imagination Technologies’ royalties a huge boost, according to Arete Research Services.
The investment outfit said it did not believe the market fully appreciated just how much Imagination's royalties were being transformed by what it called “runaway” growth in the sector, as well as the increasing benefits of being Apple’s graphics partner of choice.
The sale of Apple units not only nearly doubled in 2011, said Arete, but also saw rising average selling prices as the firm’s A5 chip continued to ramp sharply.
Apple's A5 uses a multi-core GPU, an improvement on the previous single-core in the A4 chip, and a royalty increase of some 20 to40 percent for IMG, according to Arete.
The A5 chip also uses Imagination's HD video processor, which together with the GPU brings Imagination's royalty per A5 chip to something in the region of 43 cents, as opposed to just 34 cents for the A4, said Arete.
Apple currently accounts for almost 55 percent of Imagination's total royalties at present, up from 40 percent in 2010.
Even without Apple’s significant chunk of royalties, Imagination's unit growth is robust.
Amazon’s Kindle Fire, which uses Imagination graphics, is selling well, with analysts predicting shipments are likely to grow even more sharply throughout 2012. Meanwhile, Samsung seems to have taken a step back from ARM’s Mali graphics, selecting Imagination's GPU core for the next generation of Exynos (5000 series), which ramps in the second half of the year.
Imagination is not just seeing a spike in demand at the high-end of the smartphone market, but at the lower-end, too, with licensee partner MediaTek planning to ship some 50 million Android devices in 2012 (with a royalty for Imagination at 15 cents per chip), up from 10 million in 2011, according to Arete figures.
Meanwhile, another licensee, Intel Corp., is making aggressive moves into the tablet and smartphone space which, if successful, would see a further uptick for Imagination. The upcoming release of Windows 8, too, may provide a boon for the firm.
Imagination talks about what Windows 8 means for the firm in the following video:
With multi core graphics becoming a norm these days, imagination revenues set to multiply many times. If somebody ought to make a application processor with 10X GPU cores, they receive 10X royalty, compared to single core?
interestingly there appears to be a new Linux oss initiative to make an open driver for the closed Mali driver parts just getting started here http://limadriver.org/
a bit raw for the moment, but i expect all Mali kit to get a good PR boost from End users buying developer/peer advocated mali devices if this initiative takes off in time.