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Imagination Technologies Says Wearable Boom Will Vindicate Its Risky Expansion

Apr 1 2014, 3:37pm CDT | by , in News

Chip Designer Imagination Says Wearable Boom Will Vindicate Its Risky Expansion
 
 

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Imagination Technologies Says Wearable Boom Will Vindicate Its Risky Expansion

It’s over a year since Imagination Technologies (LON:IMG) trespassed into ARM’s territory, through the bullish $100 million acquisition of the mobile CPU designer MIPS.

Back then I argued that the acquisition would shake things up and ultimately contribute to the end of ARM’s mobile monopoly, but the market vehemently disagreed.

Aside from a few recent fluctuations, a 12-month plot of the IMG stock price is essentially a straight line in the wrong direction, falling from $400 before the acquisition to around $200 today.

But it’s still early, given how long things take in the silicon business, and actually there are signs that Imagination is beginning to find a market for its new MIPS processors, in the form of wearable devices running Android.

A few MIPS-based smartwatches have launched in China and elsewhere over the past couple of months, for prices as low as $99, suggesting that wearable makers are prepared to look beyond ARM’s catalog when they need to buy a chip.

The MIPS hardware platform underpinning these smartwatches (known as “Newton” and built in China by Ingenic) has secured further design wins in recent weeks and, according to Imagination spokesman Alexandru Voica, it’s “now ready for worldwide deployment” — although I don’t know what products it’ll appear in next, or how attractive they’ll be.

It has also been revealed that Imagination Technologies is a key partner in Google's Android Wear project, in which ARM is conspicuously absent. Although Intel and Qualcomm are Android Wear partners too, Imagination claims its role is unique because it’s the only partner that licenses CPU designs to other companies — Intel and Qualcomm both make their own chips, and they tend to be expensive.

According to Voica, Imagination’s “strategic relationship” with Google will allow it to offer a number of benefits to chip makers who decide they want in on the wearable action, including better access to Google’s resources and reduced time to market.

Further down the road, Imagination is still planning to upgrade its MIPS chips (to the new “Warrior” range) and offer them alongside PowerVR GPUs. This will create wearable-friendly chips that are capable of 3D graphics, rather than just the basic 2D visuals we see on the faces of smartwatches today.

“We believe MIPS has a real advantage in wearables, and this will make it strong again,” says Voica.

The truth, however, is that my original argument in favor of the MIPS acquisition has yet to be proven one way or the other. We may be seeing signs that the establishment of wearables as an entirely new product category could be good for Imagination, but the Warrior CPU remains completely untested and existing MIPS wearables have yet to gain any mainstream traction.

Meanwhile, Intel has also set its sights on wearable chips, with the Edison platform coming this summer. This means Imagination’s CPU efforts will soon be sandwiched between two giants, Intel and ARM, rather than being free to dance around the feet of just one.

Source: Forbes

 

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<a href="/latest_stories/all/all/31" rel="author">Forbes</a>
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