The first point, which I think applies to the whole situation we’ve been in, is that If we didn’t want to engage in China everyone would doubt our business strategy. It’s a huge opportunity.
IP is an international business and Imagination is one of the companies that has brought China into it, having done business there for 15 years. There's a strong synergy between the rapid pace at which China is growing its consumer semiconductor market and a requirement for IP with its inherent time-to-market advantages.
We have large share of automotive GPU today as the article points out; none of that has so far come from Chinese partners so it seems overstated to say "the vehicle by which Imagination will go to market in the automotive sector is going to be headquartered [in China]." For quite some time our main route into China automotive will be with existing customers from outside China. It will also be our route to the rest of the world.
As to "Imagination is on the back foot in the smartphone space" we have more than 30 percent share, which is significant, but it is also about the growth in the segment. So, of course, we are looking at other segments with better growth opportunities.
The deal with Apple is not a "one-time settlement to Imagination" as the article hinted, but as our press release said it is a "a new multi-year license agreement under which Apple has access to a wider range of Imagination’s intellectual property."
As to the JV, there is no sub-licensing agreement. Imagination will be delighted to license anyone who needs our IP, directly.
JVs are an expectation in some markets, and as the article rightly points out have some risks; we’d be poor competitors not to have learned from Arm’s steps in this area. As it is structured, we are very happy to be part of the JV with BAIC, in which we are a minority stakeholder - it's fair and gives us access to a major Chinese OEM.
With regard to the final paragraphs, there is no plan to redomicile the company, nor really any rationale for doing so. In some ways the location is arbitrary - we have over 40 nationalities working at our headquarters in Kings Langley, never mind our sites worldwide. The talent, like the market, is international. On that basis why not have the headquarters here in the UK?
David Harold, Chief Marketing Officer, Imagination Technologies Ltd.
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