Imagination likely to see Apple royalties slashed, then end: UBS | Reuters

Imagination likely to see Apple royalties slashed, then end: UBS | Reuters

Imagination likely to see Apple royalties slashed, then end: UBS | Reuters

Apple Inc is likely to pay graphics chip designer Imagination Technologies just one third of its current royalty rate as the smartphone giant wind downs their supply deal over the next two years, UBS estimated on Wednesday.UBS analysts predicted that Imagination would become loss-making by fiscal 2019 without any Apple royalty contributions and that the British chip designer will have to consider potential cost-cutting moves to redress the balance.Earlier this month, the British designer of graphical processing units used in smartphones said its largest customer would stop using its technology within 15 to 24 months, causing the stock to lose nearly two thirds of its value in a single day.The move sent shudders through Apple’s supply chain and has sparked investor jitters over whether Apple may rely more on its own in-house chip technology rather than external suppliers.Imagination is in talks with Apple on a new licensing deal. UBS forecasts Apple is likely to ratchet down the royalty rate it currently pays of around $0.30 to closer to $0.10 – the rate Imagination charges customers such as MediaTek.

Källa: Imagination likely to see Apple royalties slashed, then end: UBS | Reuters

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