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Intel increases share in Imagination, counters Apple move

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Intel increases share in Imagination, counters Apple move

Chicago (IL) – The world’s largest chip maker has increased its share in graphics chipset design company Imagination to 3.04%. The announcement comes just 48 hours after it was confirmed that Apple has acquired a 3.6% stake in Imagination to secure graphics chip blueprints for use in future iPhones. Although the timing of Intel’s move may attract some attention, industry watchers note that Intel, just like Apple, is a licensee of Imagination’s future PowerVR graphics and video IP cores, which means that SoC vendors can combine Intel’s Atom processor with a PowerVR graphics cores on a single die.

According to Apple Insider, Intel acquired an additional 933,422 shares in Imagination through its investment company Intel Capital. The transaction increases Intel’s share in Imagination to 3.04%.

Apple is believed to be a licensee of Imagination’s fourth-generation PowerVR MBX Lite 3D accelerator that is used in the current generation iPhone and iPod touch. Apple also holds a multi-use, multi-year license to Imagination’s future graphics and video IP cores. The company is generally expected to build its own SoC for future iPhones around an ARM processor design and Imagination’s PowerVR SGX/VXD graphics and video cores. Besides being backward compatible with code developed for the current iPhone and iPod touch, SGX/VXD cores deliver OpenGL ES 2.0 compatibility, a Universal Scalable Shader Engine for shader-based 3D graphics and power-efficient HD video decoding.

While the recent developments around Imagination may hint to a new rivalry between Apple and Intel, it has to be noted that Intel is a licensee of Imagination’s future graphics and video cores IP as well. This does not necessarily mean that Intel will build an Atom SoC with PowerVR SGX/VXD graphics and video cores. Instead, the chip maker may simply want to allow others to incorporate the Atom processor and PowerVR graphics into their own SoC designs. Although Atom is predominantly used in cheap, sub-10” notebooks called netbooks, some vendors are expected to push the product category envelope in terms of graphics performance and power efficiency beyond of what Atom may be capable of delivering.

These vendors include Apple whose rumored $600 Mac netbook may run the company’s own SoC built around an ARM processor design and PowerVR or possibly Nvidia graphics. Nvidia also plans to move into the netbook and MID market with its upcoming SoC called Tegra, expected early next year. It will incorporate an ARM-based CPU and an Nvidia GPU core on a single die, in addition to the northbridge, southbridge and primary memory functionality. First Tegra-powered products are expected early next year, which could include a Zune phone with Tegra chipset.

VIA’s announced Trinity platform features a three-chip solution that packs VIA’s latest Nano x86-64 processor, VX800 IGP chipset and discrete S3 “Chrome” graphics on an 800 MHz FSB single package, providing DirectX 10.1, HD video, Blu-ray/h.264/MP4 hardware acceleration and HDMI output on less than 70 watts max (50 watts typical).

Pressure from Nvidia, Apple and more than 500 companies that build SoCs around ARM processor blueprint is giving Intel a serious run for its money. Its next-generation Atom processor, code-named Moorestown, will not be ready until 2010. In addition, the chip maker seems to have underestimated a number of vendors planning to build products around VIA and ARM processor designs. While Intel claims Moorestown will consume up to ten times less power than the current-generation Atom and will feature SoC design with main processing and graphic cores on a single die, including a memory controller and video encoding and decoding cores, the company will have to fill the gap throughout 2009 – until Moorestown arrives.