Apple could plan to use homemade GPUs for augmented reality in upcoming versions of the iPhone.
Apple Inc. is reportedly planning to design its own graphics chips, which could lead to improvements to its gadgets and services, but could also send the iPhone maker to court.
On Monday, one of Apple’s AAPL, +0.03% chip-design partners, a British company called Imagination Technologies Group PLC IMG, -61.60% said it has been notified by its largest customer that it will no longer use Imagination’s designs in new products, starting in about 15 to 24 months. The news confirmed speculation in the past few months that Apple is working on its own design for a graphics-processing unit, or GPU .
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The complex but growing arena of graphics processors has received more attention in recent months, with market leader Nvidia Corp. NVDA, -0.50% using its designs to storm into fields like drones, autonomous cars and robotics. If GPUs are becoming the workhorse chips for deep-learning and machine-learning applications, Apple could tailor its chips to add more smarts to devices and their core offerings, like Siri.
“Nvidia is promoting their GPUs for deep learning…I imagine Apple wants to push the GPU in that direction and offload some of the Siri stuff into the phone itself, to make it respond more quickly,” said Linley Gwennap, president of The Linley Group, a tech analysis company.
Apple could also plan to use better GPUs for augmented reality, which Chief Executive Tim Cook has said is another possible feature on future iPhones.
“Augmented reality, machine learning and heavy-duty graphics, the kind that you might expect in a notebook,” Patrick Moorhead, principal analyst at Moor Insights & Strategy, suggested when asked about features that consumers could see in forthcoming products with an Apple-designed GPU.
While the end result could be favorable for Apple, the journey will not be easy.
“Graphics is more difficult than doing a CPU. There are fewer GPU architects, GPU engineers, development driver writers,” Moorhead said. “That’s why you see a lot more competition [for talent] out there in GPUs than in CPUs. It’s almost like a voodoo science.”
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Moorhead added that it’s almost impossible to create a new GPU without licensing someone’s intellectual property. And that is where Imagination, which plunged more than 60% after detailing the news Monday, could have its revenge.
The company hinted Monday that it would consider suing Apple in the near future, saying it believed that it was “extremely challenging” to design a new GPU without infringing on Imagination’s intellectual property rights.
“I do think Imagination will be looking at the new Apple GPU very closely for any patent infringements,” said Kevin Krewell, a principal analyst with Tirias Research.
Last March, Apple, which owns about 8% of Imagination, actually confirmed that it had acquisition discussions with Imagination in a rare public statement, but added that it did not plan to make an offer for the company at the time. However, Apple did recruit at least two dozen Imagination employees, according to an AppleInsider report, which could lead to accusations that Apple is looking to use their knowledge to replicate Imagination designs in its own chips.
“Those guys are totally contaminated with Imagination IP,” Gwennap said, adding that Apple should be keeping the employees isolated in a completely separate group to avoid problems. “If you talk to the companies that try to do clean-room designs, that’s what you have to do. To prove that you are not contaminated, you put them in a separate facility, they don’t have any access to documents, etc.”
With Apple’s giant war chest of cash, any patent litigation with Imagination would not be damaging, and the potential gain from designing its own graphics chips in terms of improving the iPhone and iPad would likely outweigh any legal battle with a now-former parts supplier.
