Apple to cut Imagination royalty to a third, says UBS

Imagination is likely to see its royalties from Apple reduced to a third before they are finally cut out altogether in 15-24 months’ time, says UBS.

Negotiations between Imagination and Apple are likely to see a cut in royalties from 30 cents per product sold using Imagination IP to 10 cents per product sold.

The 30 cent royalty rate brings in around $80 million a year for Imagination, which is about half its total revenues.

UBS reckons that, without Apple’s royalties, Imagination will be loss-making by 2019.

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One comment

SecretEuroPatentAgentMan
19th April 2017 at 9:47 pm

What source does UBS have for this? This sounds more like a public threat to soften Imagination, allowing Apple to buy them on the cheap or at least their intellectual property. This is a high gamble on Apple’s side, now it all depends on what counsel Imagination gets for this requires particular expertise.

It will get ugly and Imagination might go down. Imagination’s chance might be to make it clear that this would also cost Apple dearly.

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