John Paczkowski

Recent Posts by John Paczkowski

Apple Ups Stake in iPhone Chip Firm

iphonesApple (AAPL) put some of the vast $28 billion in cash and short-term investments it has socked away to good use this week, raising its stake in Imagination Technologies. The $5.16 million investment nearly triples Apple’s original 3.6 percent stake, giving it 9.5 percent ownership of the British chip designer whose PowerVR graphics technology figures prominently in the iPhone and iPod touch.

Interestingly, the move follows an investment by another high-profile licensee: Intel. The chipmaker last week increased its own stake in Imagination to 14 16 percent, causing some to speculate that Intel (INTC) was prepping a takeover bid for the company. After all, Intel uses PowerVR in its Atom platform, which is crucial to its success on the mobile phone market.

Could these dueling investments set the stage for a takeover battle for the company? It’s certainly possible, but Seymour Pierce analyst Ian Robertson says it’s unlikely.

“Apple and Intel are investors not buyers,” Robertson said in a research note. “We do not expect either Intel or Apple to go beyond 15-20 percent in the short to medium term and we would be very surprised indeed if they were to attempt to buy Imagination. We note that both Apple and Intel have the resources to swallow up the company without chewing. We remind investors that Intel has a long history of taking and holding significant stakes in companies that it has seen as important to its further success–notably Micron and RAMBUS where its investment was not necessarily a guarantee of success for these companies.”


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