By Paul Sandle
LONDON Dec 11 Imagination Technologies
said a slowdown at the top end of the smartphone market would
hit the number of chips shipped with its graphics and video
technology in the second half of the year, sending its shares
down 15 percent.
Its lower guidance, combined with disappointing first-half
results, pushed Imagination's shares down to 205 pence, their
lowest in more than three years.
The British company said it expected its partners, which
include Apple, to ship 580-630 million units, excluding
the MIPS technology that Imagination bought last year, down from
a previous forecast of about 650 million.
Chief Executive Hossein Yassaie said growth in the
smartphone market had come off the highs seen in recent years,
resulting in a miss in revenue against consensus.
"It's primarily a softness in the market in general, but
specifically in the rate of progress in mobile markets," he said
in an interview on Wednesday. "But I don't see these variations
as a trend."
Revenue, up 19 percent to 85.2 million pounds ($140
million)for the six months to the end of October, fell about 9
percent short of an analyst consensus forecast of 93.3 million
Adjusted pretax profit fell 13.2 million pounds ($21.7
million) from 16.8 million, hurt in part by growing losses at
its Pure digital radio business.
Analysts at Investec said the interim results "look ugly",
with misses versus consensus all the way down the numbers.
"The group is in a transitional year with major licensees
having pulled out of the smartphone market; others have the
potential to ramp up activity, but in financial year 2015," they
Yassaie said licensing had picked up in the period after a
slump in the second half of last year, with deals signed with
Intel and another with Broadcom that will help
Imagination get its technology in more smartphones made by
He said the group was still on track to report licensing
revenue of 38-43 million pounds for the year.
We said the company's graphics and video technology would
retain its share of being in about half of all smartphones.
"Clearly Apple use our technology, and we have big routes into
Samsung," he said.