Imagination Technologies Could Spell End Of Relationship Between Intel and Apple

Apple said last week that it was upping its stake in Imagination Technologies, a move that came within a few days of Intel's announcement that it will be partnering with one of Apple's fiercest rivals, Nokia.

Intel also has a significant stake in Imagination Technologies, which provide with the IP for the graphics subsystem of the Intel Atom platform. Apple also uses the company for its iPhone and iPod Touch models.

Both Apple and Intel are set to confront each other sooner or later. The partnership Intel has forged with Intel is set to convert the world's biggest semiconductor manufacturer into a fervent advocate of ultra mobility solutions, something many thought would never come as it sold its XScale family to Marvel Technology back in 2006.

But the pace at which smartphones are being sold is booming leaving Intel with a mature server, notebook and desktop market that is stagnating at best and shrinking dangerously in some aspects as the recession bites in.

Nokia partnering with Intel could open the doors to a market worth 400 million mobile phones sold per year by Nokia and that's in a bad year. In comparison, netbooks at best represent a market of 20 million units or so yearly.

Should Intel produce processors for Intel, they are likely to be destined for Netbooks or Mobile Internet Devices like the Nokia Tablet series before scaling all the way down to ARM-beating x86 processors or System On Chip - which is where Imagination Technologies nicely fits.

Imagination Technology is central to Intel's ambition to get a complete ultra mobile solution for smartphones. Intel however is not essential to Apple plans as the Cupertino-based company could buy Intel's rival, AMD, for $3 billion and use the latter's chippery inside its servers, laptops and desktops.

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