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Splitting Up With Apple is a Chipmaker's Nightmare (engadget.com)
Apple is such a powerful company that, for third-party suppliers, it's hard not to become reliant on the cash that it pays you. Engadget adds: But when Apple says that it's done, choosing to move whatever technology you provide in house, the results can be really painful. Imagination Technologies is one such supplier, famously designing the iPhone's PowerVR graphics as well as pushing MIPS, a rival to ARM. But back in March, Imagination publicly announced that Apple was ditching it in favor of its own graphics silicon. Now, Imagination has revealed that it's going to take Apple to dispute resolution, maintaining that the iPhone maker used Imagination's IP without permission. It's the second chipmaker in recent months who believes Apple isn't playing fair, with Qualcomm counter-suing Apple in its own licensing dispute. Secondly, Imagination is going to have to sell off MIPS and Ensigma, two parts of its business that aren't as profitable as PowerVR. Gamers with long memories will remember that MIPS designed the CPUs that lurked inside the PlayStation, PS2 and Nintendo 64.
Notably though, Imagination Tech's important patents have just expired. There's a reason that nVidia and AMD both suddenly implemented tile based renderers, and Apple suddenly decided they could viably produce their own GPU.
For Qualcomm and Imagination, I would think that their contracts with Apple were pretty iron-clad. Apple didn't become one of the biggest companies on the planet by signing deals that wasn't in their favour. Potential for abuse by Apple when the contracts were drawn up aside, I would think that the contracts are pretty solid and Apple knows exactly what it's rights are and has protected itself.
This means that the only recourse for (former) suppliers is to go after Apple, primarily in the court of public opinion, to see if there's a chance for a settlement to avoid Apple's public reputation being damaged. Although after Jobs, I don't see how it could get any worse on that front.
Mimetics Inc. Twitter
This is one of the oldest tricks in the business book.
Get a vendor to supply OVER 35% of their entire business to you alone, then cut them off (or demand massive reductions in price) and when they falter because of the drop in revenue, you either purchase them outright for a song, or scoop up their IP when they go out of business due to Bankruptcy.
Wal*Mart is famous for doing this, so was Sears back when they had non-insane management.
I worked for a company that flat-out refused business from Sears if it exceeded more than 35% of their total income for this reason.
Many years after I left them new management discarded that idea, and lo and behold within 5 years they went bankrupt when a customer demanded a 85% reduction in prices, then let them die and bought up their IP out of Bankruptcy Court for a song and moved all manufacturing to Guatemala.
Imagination Technologies should have seen this coming.
Microchip (based in Arizona), produces all kinds of MIPS chips via their PIC32mx and PIC32mz lines. Microchip is one of the top embedded systems chip makers. They bought ATMEL, the makers of the ATMEGA chips found on the Arduinos, last year.