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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.
Timmy is back and this time he's angry.
Its pretty much impossible to build a modern GPU without infringing on the patents of one of the existing players. Even Intel is stuck paying licensing fees from AMD or nVidia, its hard to see how Apple won't have to do the same.
Unless they take the lid off Apples new graphics chip and can point out hardware design similarities and possibly extract the microcode. However doing so would violate apples copyright so they could counter sue.
As usual, only the lawyers will win.
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.
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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.
I've got a couple of Zgemma Linux-based satellite TV set-top boxes and they use a MIPS chip, so it's not just used in ancient game consoles. The boxes are very nice to tinker with (Web interface, ssh, loads of pre-built plugins) and I'll put in a good word for Wooshbuild - a firmware image that makes the box interface look like S*y HD or S*y Q.
And that would be the reason my father told me never to let one client dedicate more than 30% of my business. It's also why I told my father that reliable clients sometimes get heavy discounts, to offset the lack of sales/collection efforts, which keeps them from rolling their own.
Maybe Tim Cook is not a sufficiently capable CEO.
Steve Jobs's worst decision was promoting Tim Cook (Nov 2, 2016) "Quote: Why Tim Cook is the new Steve Ballmer".
Remove Tim Cook as CEO of Apple. (Oct 31, 2016) Quote: "Many products are announced in one quarter and released in another quarter."
No it's not the law that you have to make every penny and crush you partners. And it's not even wise, because companies will become more reluctant to work with you in the future, and people will also dislike you for what you do, meaning some of them will buy from another company.
So no, it's not the law that you have to be a jerk just to make more money.
What about Silicon Graphics machines? I find it odd the article doesn't even mention SGI. I still have an O2 R12K, an Octane 2 R14K, and an Indigo 2 Impact R10K.
In a world of the blind, the one-eyed man is king--and the two-eyed man is a heretic.
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.
Between Apple and these billion dollar companies Apple's business has created, my only reaction to this is... why is the taxpayer wasting money and resources on resolving these lawsuits? They should work out their differences in private mediation.
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.
Um, this is the company that ended up with its most important parts supplier becoming its biggest competitor. They are still trying to detach themselves from Samsung, and despite having $1/4 trillion in the bank cannot get hold of the best displays in the industry.
Given that Mr Cook was in charge of all this supply chain stuff before being anointed by Jobs, why would you assume their other supply arrangements were put together any better?
Apple is quickly building a reputation with other tech companies that they are not to be trusted. The company I work for is developing a smaller version of what we already make, with the original intention of getting them into iPhones, that view has shifted in the last year or so. Now we are avoiding interaction with Apple like the plague.
It's playing just for Imagination.
Hopefully, as more of these patents expire, a Vulcan based open source GPU will emerge.
Anons need not reply. Questions end with a question mark.
Imagination doesn't make chips, so no, they didn't sell Apple chips, and Imagination hasn't yet giving Apple permission to use their technology (going forward, that is, since Apple has said it won't be paying for it). Really, the whole situation bears no resemblance to the Qualcomm case in the slightest.
At play here is that Imagination has, up to now, licensed their technologies to Apple, which Apple has used in its custom-designed chips for a few years. Apple is now claiming that their custom designs no longer rely on Imagination's technology, so they're going to stop paying. Imagination is understandably asking how that's even possible, given that the new chips presumably work the same as the old ones, which means that they likely rely on Imagination's tech.
At no point did Imagination "sell" their technology to Apple, other than as part of a licensing agreement that was contingent on continued royalty payments. So, yes, they get to have a say in how Apple uses their technology, assuming, of course, that Apple is actually still using their technology.
not sure if its a sane long term strategy from apple, just look at the maps debacle... just because they have the cash to do every thing doesn;t mean they will do it better or heck just as good. MS is another one of those examples, how many times has MS tried to screw over oem and builders... every time crawling back.
At play here is that Imagination has, up to now, licensed their technologies to Apple, which Apple has used in its custom-designed chips for a few years. Apple is now claiming that their custom designs no longer rely on Imagination's technology, so they're going to stop paying. Imagination is understandably asking how that's even possible, given that the new chips presumably work the same as the old ones, which means that they likely rely on Imagination's tech.
In the arena of mobile GPUs, Imagination certainly isn't the only company so it's not like they are the only choice. Qualcomm makes their own proprietary GPU. nVidia and ARM also offer designs to be licensed. I would think Apple may rely on their architectural license with ARM and leverage that into designing a Mali based GPU. But let's see the details.
Well, there's spam egg sausage and spam, that's not got much spam in it.
And it's not even wise, because companies will become more reluctant to work with you in the future, and people will also dislike you for what you do, meaning some of them will buy from another company.
In the case of Apple, this just isn't true. Apple customers love Apple, no matter what they do, and will defend Apple's actions to the death if necessary. They won't buy from another company no matter what. They're also willing to make their Apple purchases their top priority, and would even take out a second mortgage on their house if necessary to continue their Apple spending habit, so there's a lot of room for Apple to keep jacking up prices to keep profits high, even if a few malcontents leave them.
I'm not sure how deciding to stop buying somebody's product makes you "not to be trusted". It sucks for PowerVR, but why should Apple be obligated to only ever buy mobile GPUs from one company?
When you build your company based on income mainly from one giant customer, you are eventually going to lose.
Well in terms of the hardware side, there is a reason that Apple is designing their own stuff. Originally Samsung supplied the SoC for the iPhone which Apple felt was adequate but wasn't exactly everything they wanted. But here is the problem: Apple could have asked more customizations but that would have cost a lot more money and time. Samsung is in the business of making mobile SoCs for many companies not just Apple so they can't just design something that Apple wants and ignore the rest of the industry.
So Apple bought out chip design companies and are designing their own SoCs and CPUs. Also part of this arrangement is they are no longer 100% dependent on Samsung to make their chips. For now Imagination has been the supplier the GPU designs. I thought it was a matter of time before Apple started designing their own GPU as well.
Well, there's spam egg sausage and spam, that's not got much spam in it.
famously to Vlassic Pickle. when you buy them these days it's a different company that bought the brand when it went under. The scam is you go to a company, give them a huge contract, they borrow a bunch of money to buy equipment to meet demand and then you leverage that by threatening to break the agreement. The bigger company might be breaking a contract but by the time that gets hashed out in court the smaller one is going to be bankrupt...
Hi! I make Firefox Plug-ins. Check 'em out @ https://addons.mozilla.org/en-US/firefox/addon/youtube-mp3-podcaster/
There's a reason that nVidia and AMD both suddenly implemented tile based renderers,
Actually, Nvidia has had their own TBR patents for quite some time :
- Nvidia bought up 3DFx for their patents and their engineer back when that one went bankrupt.
- Before that, 3DFx had bought up Gigapixel, among other for their TBR patents, to be used in future product (forgot the code name) - and HSR (hidden surface removal) tech to be applied much earlier in then current product (in the then VSA-100 / Voodoo4/5/6 and in the upcoming Rampage / Spectre)
So Nvidia indirectly acquired TBR patents.
Though for the record, they were more interested in the know-how and engineer which where working on the Rampage GPU ("3DFx Spectre" cards) due to programmable pixel shaders being all the rage, and retained them to work on GeForce FX (speculation backthen that probably the pun in the name was intended... )
So in theory, they could have moved into the field much faster than ATI / AMD.
(But back at the Rampage / GeForce FX era, there where some area were TBR was problamatic : e.g. some transparency (i.e.: simple alpha-blend, back then) couldn't be handled in a single pass easily. So probably they decided not to bother.
Given that modern games work with tons of subsequent passes (transparent materials cause diffraction/distortion in a separate pass of a pixel-shader), I would suspect that it's not that much a problem anymore).
"Sufficiently advanced satire is indistinguishable from reality." - [Tips: 1DrYakQDKCQ6y52z6QbnkxHXAocMZJE61o ]
Hopefully, as more of these patents expire, a Vulcan based open source GPU will emerge.
As the numerous past failures of attempts at opensource GPU or even opensource graphic cards have shown, making a functional and competitive graphic card is EXTREMELY difficult.
"Sufficiently advanced satire is indistinguishable from reality." - [Tips: 1DrYakQDKCQ6y52z6QbnkxHXAocMZJE61o ]
Apple is quickly building a reputation with other tech companies that they are not to be trusted. The company I work for is developing a smaller version of what we already make, with the original intention of getting them into iPhones, that view has shifted in the last year or so. Now we are avoiding interaction with Apple like the plague.
Then your management isn't very smart.
If you know the game going-in, then you can certainly reap the rewards of selling to a company with huge sales, but not get so reliant on that one customer that you over-expand, and then collapse when the party's over.
And BTW, every single company even in the same ballpark as Apple is going to be exactly the same way. Afterall, that's what they teach in $FAMOUS_MBA_SCHOOL$".
The parent post mentions SGI iron.
but also let's not forget multitude of routing equipment (CISCO was/is a big user of MIPS processors).
Also, the Chinese have developed MIPS processors for use in anything from laptops to SuperComputers... (Loongson/Godson).
MIPS cores are also used in many cheapo routers/modems
*** Suerte a todos y Feliz dia!
What is rumoured is that apple developed pretty much their whole graphics core, very different from imagination's, while the front end and some fixed functions are still imagination's IP. Either they are sure that by the time of implementation those will be developed IP free as well, or not encumbered by patetnts anymore.
Of course engineers and lawyers are fallibe, and if Imagination surveys the graphics core with a fine enough comb, they may find some nuggets of their IP there. Or be a pebble in the shoe of apple in order to get some monies...
But in the end, if push comes to shove, Apple can either settle with Imagination out of court, or buy Vivante technologies for what (for apple) is pocket lint/change, getting pattent protection in the operation.
whichever is cheaper.
*** Suerte a todos y Feliz dia!
On the flip side, if there are true business advantages to moving something in-house, should a company pass it up just to "be nice"?
On the flip side, there are often very heavy non-exclusive agreements that are pushed on you when you supply to someone like Apple or MS. So you end up being nothing more than a division of their company that can be cut off any day. Proceed at your own risk.
Did you read about what happened to that sapphire glass company a couple years back? Apple made them sign a deal that they couldn't sell their glass to other customers.
Apple is building the rep that they only contract with you long enough to get a good hands on with your parts, then abruptly cutting ties and making it themselves.
I'm not sure why so many folks think that a business relationship is the same thing as a lifelong blood oath. If you can get the same or better performance out of chips by sourcing them in house, and it's cheaper, it only makes sense to do so, and would practically be demanded as part of their fiduciary responsibility to their stockholders.
Exactly, "magical pipeline" is something Steve Jobs would never have done.
There is an explanation in the article to which I linked, with this quote: "Why Tim Cook is the new Steve Ballmer".
I'm searching for some depth of understanding.
They licensed GPUs from Imagination for more than a decade, you make it sound like this was a hit-and-run. Business relationships don't last forever, and it wasn't exactly abrubt considering they've been gradually replacing chunks of the GPUs with in-house designs for some time now: at this point only the fixed-function hardware is still designed by Imagination. Is it any surprise that they now want to move the last chunk over to an in-house design, like they did with their CPUs years ago?
Did you read about what happened to that sapphire glass company a couple years back? Apple made them sign a deal that they couldn't sell their glass to other customers.
Apple didn't make them do anything.
There's not necessarily a business advantage, it's that Apple wants to do everything itself, just like Sony did in its heyday. That's always been the devil's bargain with Apple, you can sell/license your stuff to them at a good rate, but the party only lasts as long as it takes them to move your magic dingus tech in-house. After that, you'd better not be in a position where you've committed 95% of your business to selling to Apple...
In terms of burning your suppliers, Commodore was notorious for doing this. Eventually you run out of suppliers to burn, and then things get tricky.
I'm not liking Apple right now. Destroying several companies in their quest to gain more cash.
Errm, how exactly is Apple crushing anybody here? They should be about where they were before they started making lots of money by selling to Apple, probably in a much better position actually, since the market has grown massively since then.
Unless of course either A) Apple saved them by doing business with them back then, or B) their product is too bad for Apple's competition to buy. Then they are blaming Apple for either not dragging their dead body along any more, or for no longer buying something from them that is substandard and makes Apple's products look bad. Boo-fucking-hooh.
Of course news about a fake are Fake News.
There's not necessarily a business advantage, it's that Apple wants to do everything itself, just like Sony did in its heyday. That's always been the devil's bargain with Apple, you can sell/license your stuff to them at a good rate, but the party only lasts as long as it takes them to move your magic dingus tech in-house. After that, you'd better not be in a position where you've committed 95% of your business to selling to Apple...
Well, you just could have chosen not to do business with Apple. Then your company may have died years ago. Much better that way.
Of course news about a fake are Fake News.
What I don't understand is this from TFS:
Imagination is going to have to sell off MIPS and Ensigma, two parts of its business that aren't as profitable as PowerVR
I've seen similar things stated by other companies over the years. Oh, they're struggling, so they're selling off less profitable parts. That's the way it's usually stated, rather than something like, "selling off non-profitable divisions" or something like that.
If it's profitable, at all, then there's no reason to sell it. The only reason to sell it would be if they weren't calculating "profit" correctly. If it's bringing in any profit, then selling it is only going to reduce the amount of extra money they can throw into their favorite products.
And at one time "Nobody ever got fired for choosing IBM" was a saying. Not so much anymore however. apple is the new IBM.
So when has anybody ever said "Nobody ever got fired for choosing Apple"?
Of course news about a fake are Fake News.
Did you read about what happened to that sapphire glass company a couple years back? Apple made them sign a deal that they couldn't sell their glass to other customers.
No they didn't. Which you can easily tell by the fact that the company made furnaces, not glass. At least before Apple asked them to make sapphire glass for them with their own furnaces.
Of course news about a fake are Fake News.
It doesn't answer the question. Maybe only 108 people knew about the petition.